Correlation Between Blue Owl and Sprott

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

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

Diversification Opportunities for Blue Owl and Sprott

-0.08

Correlation Coefficient

Blue Owl  Sprott

Good diversification

The 3 months correlation between Blue and Sprott is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Blue Owl Capital and Sprott Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Inc and Blue Owl 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 Blue Owl Capital are associated (or correlated) with Sprott. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Inc has no effect on the direction of Blue Owl i.e., Blue Owl and Sprott go up and down completely randomly.

Pair Corralation between Blue Owl and Sprott

Considering the 90-day investment horizon Blue Owl Capital is expected to under-perform the Sprott. In addition to that, Blue Owl is 1.44 times more volatile than Sprott Inc. It trades about -0.06 of its total potential returns per unit of risk. Sprott Inc is currently generating about 0.06 per unit of volatility. If you would invest  4,224  in Sprott Inc on December 26, 2024 and sell it today you would earn a total of  236.00  from holding Sprott Inc or generate 5.59% return on investment over 90 days.

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

Blue Owl Capital  vs.  Sprott Inc

Blue Owl Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blue Owl Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Sprott Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Sprott may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Blue Owl and Sprott

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

The idea behind Blue Owl Capital and Sprott Inc 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.