Correlation Between Sprott Physical and Calian Technologies

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

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

Diversification Opportunities for Sprott Physical and Calian Technologies

0.44

Correlation Coefficient

Sprott Physical  Calian Technologies

Very weak diversification

The 3 months correlation between Sprott and Calian is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Physical Gold and Calian Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calian Technologies and Sprott Physical 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 Sprott Physical Gold are associated (or correlated) with Calian Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calian Technologies has no effect on the direction of Sprott Physical i.e., Sprott Physical and Calian Technologies go up and down completely randomly.

Pair Corralation between Sprott Physical and Calian Technologies

Assuming the 90 days trading horizon Sprott Physical is expected to generate 1.33 times less return on investment than Calian Technologies. But when comparing it to its historical volatility, Sprott Physical Gold is 1.45 times less risky than Calian Technologies. It trades about 0.28 of its potential returns per unit of risk. Calian Technologies is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  4,821  in Calian Technologies on October 25, 2024 and sell it today you would earn a total of  369.00  from holding Calian Technologies or generate 7.65% return on investment over 90 days.

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

Sprott Physical Gold  vs.  Calian Technologies

Sprott Physical Gold

Risk-Adjusted Performance

0 of 100

Very Weak

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

Calian Technologies

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Calian Technologies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Calian Technologies may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Sprott Physical and Calian Technologies

The main advantage of trading using opposite Sprott Physical and Calian Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Physical position performs unexpectedly, Calian Technologies 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 Calian Technologies will offset losses from the drop in Calian Technologies' long position.

The idea behind Sprott Physical Gold and Calian Technologies 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.