Correlation Between Sprott Physical and BLNG

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

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

Diversification Opportunities for Sprott Physical and BLNG

0.0

Correlation Coefficient

Sprott Physical  BLNG

Pay attention - limited upside

The 3 months correlation between Sprott and BLNG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Physical Silver and BLNG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BLNG 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 Silver are associated (or correlated) with BLNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BLNG has no effect on the direction of Sprott Physical i.e., Sprott Physical and BLNG go up and down completely randomly.

Pair Corralation between Sprott Physical and BLNG

If you would invest  955.00  in Sprott Physical Silver on October 9, 2024 and sell it today you would earn a total of  45.00  from holding Sprott Physical Silver or generate 4.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.61%
Values	Daily Returns

Sprott Physical Silver  vs.  BLNG

Sprott Physical Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sprott Physical Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Sprott Physical is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

BLNG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BLNG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, BLNG is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Sprott Physical and BLNG

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

The idea behind Sprott Physical Silver and BLNG 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.