Correlation Between BlackRock Capital and Sprott Physical

Can any of the company-specific risk be diversified away by investing in both BlackRock Capital and Sprott Physical at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining BlackRock Capital and Sprott Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BlackRock Capital Allocation and Sprott Physical Silver, you can compare the effects of market volatilities on BlackRock Capital and Sprott Physical and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in BlackRock Capital with a short position of Sprott Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Capital and Sprott Physical.

Diversification Opportunities for BlackRock Capital and Sprott Physical

0.78

Correlation Coefficient

BlackRock Capital  Sprott Physical

Poor diversification

The 3 months correlation between BlackRock and Sprott is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Capital Allocation and Sprott Physical Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Physical Silver and BlackRock Capital is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on BlackRock Capital Allocation are associated (or correlated) with Sprott Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Physical Silver has no effect on the direction of BlackRock Capital i.e., BlackRock Capital and Sprott Physical go up and down completely randomly.

Pair Corralation between BlackRock Capital and Sprott Physical

Given the investment horizon of 90 days BlackRock Capital is expected to generate 1.43 times less return on investment than Sprott Physical. But when comparing it to its historical volatility, BlackRock Capital Allocation is 2.04 times less risky than Sprott Physical. It trades about 0.19 of its potential returns per unit of risk. Sprott Physical Silver is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  986.00  in Sprott Physical Silver on December 2, 2024 and sell it today you would earn a total of  65.00  from holding Sprott Physical Silver or generate 6.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

BlackRock Capital Allocation  vs.  Sprott Physical Silver

BlackRock Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days BlackRock Capital Allocation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, BlackRock Capital is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Sprott Physical Silver

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Physical Silver are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable essential indicators, Sprott Physical is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with BlackRock Capital and Sprott Physical

The main advantage of trading using opposite BlackRock Capital and Sprott Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Capital position performs unexpectedly, Sprott Physical can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sprott Physical will offset losses from the drop in Sprott Physical's long position.

The idea behind BlackRock Capital Allocation and Sprott Physical Silver pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.