Correlation Between Sprott Physical and Harvest Tech

Can any of the company-specific risk be diversified away by investing in both Sprott Physical and Harvest Tech 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 Harvest Tech 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 Harvest Tech Achievers, you can compare the effects of market volatilities on Sprott Physical and Harvest Tech 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 Harvest Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Physical and Harvest Tech.

Diversification Opportunities for Sprott Physical and Harvest Tech

-0.36

Correlation Coefficient

Sprott Physical  Harvest Tech

Very good diversification

The 3 months correlation between Sprott and Harvest is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Physical Uranium and Harvest Tech Achievers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harvest Tech Achievers 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 Harvest Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harvest Tech Achievers has no effect on the direction of Sprott Physical i.e., Sprott Physical and Harvest Tech go up and down completely randomly.

Pair Corralation between Sprott Physical and Harvest Tech

Assuming the 90 days trading horizon Sprott Physical Uranium is expected to generate 1.55 times more return on investment than Harvest Tech. However, Sprott Physical is 1.55 times more volatile than Harvest Tech Achievers. It trades about 0.06 of its potential returns per unit of risk. Harvest Tech Achievers is currently generating about -0.09 per unit of risk. If you would invest  2,530  in Sprott Physical Uranium on October 6, 2024 and sell it today you would earn a total of  52.00  from holding Sprott Physical Uranium or generate 2.06% return on investment over 90 days.

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

Sprott Physical Uranium  vs.  Harvest Tech Achievers

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.

Harvest Tech Achievers

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Harvest Tech Achievers are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Harvest Tech is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Sprott Physical and Harvest Tech

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

The idea behind Sprott Physical Uranium and Harvest Tech Achievers 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.

Check out your portfolio center.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.