Correlation Between VanEck Robotics and Sprott Nickel

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

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

Diversification Opportunities for VanEck Robotics and Sprott Nickel

0.33

Correlation Coefficient

VanEck Robotics  Sprott Nickel

Weak diversification

The 3 months correlation between VanEck and Sprott is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Robotics ETF 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 VanEck Robotics 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 VanEck Robotics ETF 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 VanEck Robotics i.e., VanEck Robotics and Sprott Nickel go up and down completely randomly.

Pair Corralation between VanEck Robotics and Sprott Nickel

Given the investment horizon of 90 days VanEck Robotics ETF is expected to generate 0.74 times more return on investment than Sprott Nickel. However, VanEck Robotics ETF is 1.36 times less risky than Sprott Nickel. It trades about 0.01 of its potential returns per unit of risk. Sprott Nickel Miners is currently generating about -0.12 per unit of risk. If you would invest  4,202  in VanEck Robotics ETF on December 25, 2024 and sell it today you would earn a total of  4.00  from holding VanEck Robotics ETF or generate 0.1% return on investment over 90 days.

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

VanEck Robotics ETF  vs.  Sprott Nickel Miners

VanEck Robotics ETF

Risk-Adjusted Performance

Very Weak

Over the last 90 days VanEck Robotics ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, VanEck Robotics is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Sprott Nickel Miners

Risk-Adjusted Performance

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 weak performance in the last few months, the Etf's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the ETF venture institutional investors.

Pair Trading with VanEck Robotics and Sprott Nickel

The main advantage of trading using opposite VanEck Robotics and Sprott Nickel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Robotics 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 VanEck Robotics ETF 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.