Correlation Between BrandywineGLOBAL and Sprott Nickel

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

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

Diversification Opportunities for BrandywineGLOBAL and Sprott Nickel

-0.32

Correlation Coefficient

BrandywineGLOBAL  Sprott Nickel

Very good diversification

The 3 months correlation between BrandywineGLOBAL and Sprott is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding BrandywineGLOBAL Dynamic and Sprott Nickel Miners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Nickel Miners and BrandywineGLOBAL 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 BrandywineGLOBAL Dynamic are associated (or correlated) with Sprott Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Nickel Miners has no effect on the direction of BrandywineGLOBAL i.e., BrandywineGLOBAL and Sprott Nickel go up and down completely randomly.

Pair Corralation between BrandywineGLOBAL and Sprott Nickel

Given the investment horizon of 90 days BrandywineGLOBAL Dynamic is expected to generate 0.44 times more return on investment than Sprott Nickel. However, BrandywineGLOBAL Dynamic is 2.29 times less risky than Sprott Nickel. It trades about 0.1 of its potential returns per unit of risk. Sprott Nickel Miners is currently generating about -0.02 per unit of risk. If you would invest  1,221  in BrandywineGLOBAL Dynamic on September 13, 2024 and sell it today you would earn a total of  232.00  from holding BrandywineGLOBAL Dynamic or generate 19.0% return on investment over 90 days.

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

BrandywineGLOBAL Dynamic  vs.  Sprott Nickel Miners

BrandywineGLOBAL D

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BrandywineGLOBAL Dynamic are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, BrandywineGLOBAL is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Sprott Nickel Miners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sprott Nickel Miners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Sprott Nickel is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with BrandywineGLOBAL and Sprott Nickel

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

The idea behind BrandywineGLOBAL Dynamic and Sprott Nickel Miners 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.