Correlation Between Sprott Physical and Plaza Retail

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

Diversification Opportunities for Sprott Physical and Plaza Retail

0.85

Correlation Coefficient

Sprott Physical  Plaza Retail

Very poor diversification

The 3 months correlation between Sprott and Plaza is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Physical Gold and Plaza Retail REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plaza Retail REIT 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 Plaza Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plaza Retail REIT has no effect on the direction of Sprott Physical i.e., Sprott Physical and Plaza Retail go up and down completely randomly.

Pair Corralation between Sprott Physical and Plaza Retail

Assuming the 90 days trading horizon Sprott Physical Gold is expected to generate 0.85 times more return on investment than Plaza Retail. However, Sprott Physical Gold is 1.17 times less risky than Plaza Retail. It trades about 0.26 of its potential returns per unit of risk. Plaza Retail REIT is currently generating about 0.1 per unit of risk. If you would invest  3,419  in Sprott Physical Gold on December 31, 2024 and sell it today you would earn a total of  601.00  from holding Sprott Physical Gold or generate 17.58% return on investment over 90 days.

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

Sprott Physical Gold  vs.  Plaza Retail REIT

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 20 (%) 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.

Plaza Retail REIT

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Plaza Retail REIT are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Plaza Retail may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Pair Trading with Sprott Physical and Plaza Retail

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

The idea behind Sprott Physical Gold and Plaza Retail REIT 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.