Correlation Between Sprott Uranium and IShares MSCI

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

Diversification Opportunities for Sprott Uranium and IShares MSCI

0.17

Correlation Coefficient

Sprott Uranium  IShares MSCI

Average diversification

The 3 months correlation between Sprott and IShares is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Uranium Miners and iShares MSCI Turkey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Turkey 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 IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI Turkey has no effect on the direction of Sprott Uranium i.e., Sprott Uranium and IShares MSCI go up and down completely randomly.

Pair Corralation between Sprott Uranium and IShares MSCI

Given the investment horizon of 90 days Sprott Uranium Miners is expected to under-perform the IShares MSCI. In addition to that, Sprott Uranium is 1.14 times more volatile than iShares MSCI Turkey. It trades about -0.08 of its total potential returns per unit of risk. iShares MSCI Turkey is currently generating about -0.07 per unit of volatility. If you would invest  3,672  in iShares MSCI Turkey on December 25, 2024 and sell it today you would lose (409.00) from holding iShares MSCI Turkey or give up 11.14% of portfolio value over 90 days.

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

Sprott Uranium Miners  vs.  iShares MSCI Turkey

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.

iShares MSCI Turkey

Risk-Adjusted Performance

Very Weak

Over the last 90 days iShares MSCI Turkey has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady 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.

Pair Trading with Sprott Uranium and IShares MSCI

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

The idea behind Sprott Uranium Miners and iShares MSCI Turkey 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.