Correlation Between Sprott Focus and BigBearai Holdings

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

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

Diversification Opportunities for Sprott Focus and BigBearai Holdings

0.53

Correlation Coefficient

Sprott Focus  BigBearai Holdings

Very weak diversification

The 3 months correlation between Sprott and BigBearai is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Focus Trust and BigBearai Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BigBearai Holdings and Sprott Focus 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 Focus Trust are associated (or correlated) with BigBearai Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BigBearai Holdings has no effect on the direction of Sprott Focus i.e., Sprott Focus and BigBearai Holdings go up and down completely randomly.

Pair Corralation between Sprott Focus and BigBearai Holdings

Given the investment horizon of 90 days Sprott Focus Trust is expected to generate 0.08 times more return on investment than BigBearai Holdings. However, Sprott Focus Trust is 12.93 times less risky than BigBearai Holdings. It trades about 0.07 of its potential returns per unit of risk. BigBearai Holdings is currently generating about -0.02 per unit of risk. If you would invest  712.00  in Sprott Focus Trust on December 29, 2024 and sell it today you would earn a total of  24.00  from holding Sprott Focus Trust or generate 3.37% return on investment over 90 days.

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

Sprott Focus Trust  vs.  BigBearai Holdings

Sprott Focus Trust

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Focus Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Sprott Focus is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

BigBearai Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days BigBearai Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Sprott Focus and BigBearai Holdings

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

The idea behind Sprott Focus Trust and BigBearai Holdings 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.