Correlation Between Sprott Physical and JSC National

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

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

Diversification Opportunities for Sprott Physical and JSC National

-0.13

Correlation Coefficient

Sprott Physical  JSC National

Good diversification

The 3 months correlation between Sprott and JSC is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Physical Uranium and JSC National Atomic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JSC National Atomic 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 Uranium are associated (or correlated) with JSC National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JSC National Atomic has no effect on the direction of Sprott Physical i.e., Sprott Physical and JSC National go up and down completely randomly.

Pair Corralation between Sprott Physical and JSC National

Assuming the 90 days trading horizon Sprott Physical Uranium is expected to under-perform the JSC National. In addition to that, Sprott Physical is 1.22 times more volatile than JSC National Atomic. It trades about -0.26 of its total potential returns per unit of risk. JSC National Atomic is currently generating about -0.16 per unit of volatility. If you would invest  3,820  in JSC National Atomic on September 20, 2024 and sell it today you would lose (230.00) from holding JSC National Atomic or give up 6.02% of portfolio value over 90 days.

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

Sprott Physical Uranium  vs.  JSC National Atomic

Sprott Physical Uranium

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sprott Physical Uranium has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Sprott Physical is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

JSC National Atomic

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JSC National Atomic are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, JSC National may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Sprott Physical and JSC National

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

The idea behind Sprott Physical Uranium and JSC National Atomic 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.