Correlation Between Sprott Physical and Procure Space

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

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

Diversification Opportunities for Sprott Physical and Procure Space

-0.83

Correlation Coefficient

Sprott Physical  Procure Space

Pay attention - limited upside

The 3 months correlation between Sprott and Procure is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Physical Platinum and Procure Space ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procure Space ETF 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 Platinum are associated (or correlated) with Procure Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procure Space ETF has no effect on the direction of Sprott Physical i.e., Sprott Physical and Procure Space go up and down completely randomly.

Pair Corralation between Sprott Physical and Procure Space

Given the investment horizon of 90 days Sprott Physical Platinum is expected to under-perform the Procure Space. But the etf apears to be less risky and, when comparing its historical volatility, Sprott Physical Platinum is 1.19 times less risky than Procure Space. The etf trades about -0.1 of its potential returns per unit of risk. The Procure Space ETF is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  1,873  in Procure Space ETF on October 7, 2024 and sell it today you would earn a total of  546.00  from holding Procure Space ETF or generate 29.15% return on investment over 90 days.

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

Sprott Physical Platinum  vs.  Procure Space ETF

Sprott Physical Platinum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sprott Physical Platinum has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain 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.

Procure Space ETF

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Procure Space ETF are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Procure Space displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sprott Physical and Procure Space

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

The idea behind Sprott Physical Platinum and Procure Space ETF 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.