Correlation Between Sprott Focus and SCREEN Holdings

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

Diversification Opportunities for Sprott Focus and SCREEN Holdings

0.41

Correlation Coefficient

Sprott Focus  SCREEN Holdings

Very weak diversification

The 3 months correlation between Sprott and SCREEN is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Focus Trust and SCREEN Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCREEN 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 SCREEN Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCREEN Holdings has no effect on the direction of Sprott Focus i.e., Sprott Focus and SCREEN Holdings go up and down completely randomly.

Pair Corralation between Sprott Focus and SCREEN Holdings

If you would invest  727.00  in Sprott Focus Trust on October 22, 2024 and sell it today you would earn a total of  43.00  from holding Sprott Focus Trust or generate 5.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	11.11%
Values	Daily Returns

Sprott Focus Trust  vs.  SCREEN Holdings Co

Sprott Focus Trust

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Focus Trust are ranked lower than 2 (%) 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.

SCREEN Holdings

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days SCREEN Holdings Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak basic indicators, SCREEN Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sprott Focus and SCREEN Holdings

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

The idea behind Sprott Focus Trust and SCREEN Holdings Co 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.