Correlation Between FT Cboe and Sprott Physical

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

By analyzing existing cross correlation between FT Cboe Vest and Sprott Physical Silver, you can compare the effects of market volatilities on FT Cboe and Sprott Physical 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 FT Cboe with a short position of Sprott Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of FT Cboe and Sprott Physical.

Diversification Opportunities for FT Cboe and Sprott Physical

0.97

Correlation Coefficient

FT Cboe  Sprott Physical

Almost no diversification

The 3 months correlation between IGLD and Sprott is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding FT Cboe Vest and Sprott Physical Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Physical Silver and FT Cboe 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 FT Cboe Vest are associated (or correlated) with Sprott Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Physical Silver has no effect on the direction of FT Cboe i.e., FT Cboe and Sprott Physical go up and down completely randomly.

Pair Corralation between FT Cboe and Sprott Physical

Given the investment horizon of 90 days FT Cboe is expected to generate 1.54 times less return on investment than Sprott Physical. But when comparing it to its historical volatility, FT Cboe Vest is 2.06 times less risky than Sprott Physical. It trades about 0.27 of its potential returns per unit of risk. Sprott Physical Silver is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  981.00  in Sprott Physical Silver on December 27, 2024 and sell it today you would earn a total of  163.00  from holding Sprott Physical Silver or generate 16.62% return on investment over 90 days.

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

FT Cboe Vest  vs.  Sprott Physical Silver

FT Cboe Vest

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FT Cboe Vest are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak essential indicators, FT Cboe may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Sprott Physical Silver

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Physical Silver are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile essential indicators, Sprott Physical showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FT Cboe and Sprott Physical

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

The idea behind FT Cboe Vest and Sprott Physical Silver 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..