Correlation Between IShares MSCI and Sprott Physical

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

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

Diversification Opportunities for IShares MSCI and Sprott Physical

0.97

Correlation Coefficient

IShares MSCI  Sprott Physical

Almost no diversification

The 3 months correlation between IShares and Sprott is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Global 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 IShares MSCI 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 iShares MSCI Global 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 IShares MSCI i.e., IShares MSCI and Sprott Physical go up and down completely randomly.

Pair Corralation between IShares MSCI and Sprott Physical

Given the investment horizon of 90 days iShares MSCI Global is expected to under-perform the Sprott Physical. In addition to that, IShares MSCI is 1.78 times more volatile than Sprott Physical Silver. It trades about -0.22 of its total potential returns per unit of risk. Sprott Physical Silver is currently generating about -0.23 per unit of volatility. If you would invest  1,065  in Sprott Physical Silver on October 9, 2024 and sell it today you would lose (65.00) from holding Sprott Physical Silver or give up 6.1% of portfolio value over 90 days.

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

iShares MSCI Global  vs.  Sprott Physical Silver

iShares MSCI Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares MSCI Global has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest fragile performance, the Etf's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the ETF retail investors.

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.

Pair Trading with IShares MSCI and Sprott Physical

The main advantage of trading using opposite IShares MSCI and Sprott Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI 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 iShares MSCI Global 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..