Correlation Between ETF Managers and Sprott Physical

Can any of the company-specific risk be diversified away by investing in both ETF Managers 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 ETF Managers and Sprott Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ETF Managers Group and Sprott Physical Silver, you can compare the effects of market volatilities on ETF Managers 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 ETF Managers with a short position of Sprott Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETF Managers and Sprott Physical.

Diversification Opportunities for ETF Managers and Sprott Physical

0.13

Correlation Coefficient

ETF Managers  Sprott Physical

Average diversification

The 3 months correlation between ETF and Sprott is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding ETF Managers Group 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 ETF Managers 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 ETF Managers Group 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 ETF Managers i.e., ETF Managers and Sprott Physical go up and down completely randomly.

Pair Corralation between ETF Managers and Sprott Physical

Given the investment horizon of 90 days ETF Managers Group is expected to under-perform the Sprott Physical. In addition to that, ETF Managers is 1.5 times more volatile than Sprott Physical Silver. It trades about -0.24 of its total potential returns per unit of risk. Sprott Physical Silver is currently generating about 0.06 per unit of volatility. If you would invest  1,011  in Sprott Physical Silver on September 12, 2024 and sell it today you would earn a total of  59.00  from holding Sprott Physical Silver or generate 5.84% return on investment over 90 days.

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

ETF Managers Group  vs.  Sprott Physical Silver

ETF Managers Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ETF Managers Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Etf's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Sprott Physical Silver

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Physical Silver are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile essential indicators, Sprott Physical may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with ETF Managers and Sprott Physical

The main advantage of trading using opposite ETF Managers and Sprott Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETF Managers 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 ETF Managers Group 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.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..