Correlation Between Sprott Uranium and VanEck Vectors

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

By analyzing existing cross correlation between Sprott Uranium Miners and VanEck Vectors ETF, you can compare the effects of market volatilities on Sprott Uranium and VanEck Vectors 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 Uranium with a short position of VanEck Vectors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Uranium and VanEck Vectors.

Diversification Opportunities for Sprott Uranium and VanEck Vectors

-0.15

Correlation Coefficient

Sprott Uranium  VanEck Vectors

Good diversification

The 3 months correlation between Sprott and VanEck is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Uranium Miners and VanEck Vectors ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Vectors ETF and Sprott Uranium 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 Uranium Miners are associated (or correlated) with VanEck Vectors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Vectors ETF has no effect on the direction of Sprott Uranium i.e., Sprott Uranium and VanEck Vectors go up and down completely randomly.

Pair Corralation between Sprott Uranium and VanEck Vectors

Given the investment horizon of 90 days Sprott Uranium Miners is expected to under-perform the VanEck Vectors. In addition to that, Sprott Uranium is 1.65 times more volatile than VanEck Vectors ETF. It trades about -0.08 of its total potential returns per unit of risk. VanEck Vectors ETF is currently generating about 0.05 per unit of volatility. If you would invest  2,097  in VanEck Vectors ETF on December 28, 2024 and sell it today you would earn a total of  84.00  from holding VanEck Vectors ETF or generate 4.01% return on investment over 90 days.

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

Sprott Uranium Miners  vs.  VanEck Vectors ETF

Sprott Uranium Miners

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sprott Uranium Miners has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the ETF investors.

VanEck Vectors ETF

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Vectors ETF are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, VanEck Vectors is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Sprott Uranium and VanEck Vectors

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

The idea behind Sprott Uranium Miners and VanEck Vectors 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.