Correlation Between Sprott Physical and Green Panda

Can any of the company-specific risk be diversified away by investing in both Sprott Physical and Green Panda 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 Green Panda 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 Green Panda Capital, you can compare the effects of market volatilities on Sprott Physical and Green Panda 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 Green Panda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Physical and Green Panda.

Diversification Opportunities for Sprott Physical and Green Panda

0.0

Correlation Coefficient

Sprott Physical  Green Panda

Pay attention - limited upside

The 3 months correlation between Sprott and Green is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Physical Gold and Green Panda Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Panda Capital 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 Green Panda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Panda Capital has no effect on the direction of Sprott Physical i.e., Sprott Physical and Green Panda go up and down completely randomly.

Pair Corralation between Sprott Physical and Green Panda

If you would invest  3,396  in Sprott Physical Gold on December 30, 2024 and sell it today you would earn a total of  624.00  from holding Sprott Physical Gold or generate 18.37% return on investment over 90 days.

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

Sprott Physical Gold  vs.  Green Panda Capital

Sprott Physical Gold

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Physical Gold are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Sprott Physical displayed solid returns over the last few months and may actually be approaching a breakup point.

Green Panda Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Green Panda Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Green Panda is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sprott Physical and Green Panda

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

The idea behind Sprott Physical Gold and Green Panda Capital 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.