Correlation Between Sprott Physical and Fiera Capital

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

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

Diversification Opportunities for Sprott Physical and Fiera Capital

-0.93

Correlation Coefficient

Sprott Physical  Fiera Capital

Pay attention - limited upside

The 3 months correlation between Sprott and Fiera is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Physical Gold and Fiera Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiera Capital and Sprott Physical 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 Physical Gold are associated (or correlated) with Fiera Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiera Capital has no effect on the direction of Sprott Physical i.e., Sprott Physical and Fiera Capital go up and down completely randomly.

Pair Corralation between Sprott Physical and Fiera Capital

Assuming the 90 days trading horizon Sprott Physical Gold is expected to generate 0.38 times more return on investment than Fiera Capital. However, Sprott Physical Gold is 2.6 times less risky than Fiera Capital. It trades about 0.32 of its potential returns per unit of risk. Fiera Capital is currently generating about -0.22 per unit of risk. If you would invest  2,873  in Sprott Physical Gold on December 30, 2024 and sell it today you would earn a total of  540.00  from holding Sprott Physical Gold or generate 18.8% return on investment over 90 days.

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

Sprott Physical Gold  vs.  Fiera Capital

Sprott Physical Gold

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Physical Gold are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Sprott Physical displayed solid returns over the last few months and may actually be approaching a breakup point.

Fiera Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fiera Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Sprott Physical and Fiera Capital

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

The idea behind Sprott Physical Gold and Fiera Capital 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.