Correlation Between Sprott Gold and Voya Jpmorgan

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

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

Diversification Opportunities for Sprott Gold and Voya Jpmorgan

-0.11

Correlation Coefficient

Sprott Gold  Voya Jpmorgan

Good diversification

The 3 months correlation between Sprott and Voya is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Gold Equity and Voya Jpmorgan Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Jpmorgan Small and Sprott Gold 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 Gold Equity are associated (or correlated) with Voya Jpmorgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Jpmorgan Small has no effect on the direction of Sprott Gold i.e., Sprott Gold and Voya Jpmorgan go up and down completely randomly.

Pair Corralation between Sprott Gold and Voya Jpmorgan

Assuming the 90 days horizon Sprott Gold Equity is expected to under-perform the Voya Jpmorgan. In addition to that, Sprott Gold is 1.58 times more volatile than Voya Jpmorgan Small. It trades about -0.18 of its total potential returns per unit of risk. Voya Jpmorgan Small is currently generating about -0.25 per unit of volatility. If you would invest  1,763  in Voya Jpmorgan Small on October 9, 2024 and sell it today you would lose (97.00) from holding Voya Jpmorgan Small or give up 5.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Sprott Gold Equity  vs.  Voya Jpmorgan Small

Sprott Gold Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sprott Gold Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong essential indicators, Sprott Gold is not utilizing all of its potentials. The new stock price disturbance, may contribute to short-term losses for the investors.

Voya Jpmorgan Small

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Jpmorgan Small are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Voya Jpmorgan is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sprott Gold and Voya Jpmorgan

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

The idea behind Sprott Gold Equity and Voya Jpmorgan Small 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.