Correlation Between Virtus Global and Sprott Physical

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

By analyzing existing cross correlation between Virtus Global Multi and Sprott Physical Gold, you can compare the effects of market volatilities on Virtus Global and Sprott Physical 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 Virtus Global with a short position of Sprott Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Global and Sprott Physical.

Diversification Opportunities for Virtus Global and Sprott Physical

-0.04

Correlation Coefficient

Virtus Global  Sprott Physical

Good diversification

The 3 months correlation between Virtus and Sprott is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Global Multi and Sprott Physical Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Physical Gold and Virtus Global 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 Virtus Global Multi are associated (or correlated) with Sprott Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Physical Gold has no effect on the direction of Virtus Global i.e., Virtus Global and Sprott Physical go up and down completely randomly.

Pair Corralation between Virtus Global and Sprott Physical

Considering the 90-day investment horizon Virtus Global Multi is expected to under-perform the Sprott Physical. But the etf apears to be less risky and, when comparing its historical volatility, Virtus Global Multi is 1.24 times less risky than Sprott Physical. The etf trades about -0.17 of its potential returns per unit of risk. The Sprott Physical Gold is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2,021  in Sprott Physical Gold on September 27, 2024 and sell it today you would earn a total of  0.00  from holding Sprott Physical Gold or generate 0.0% return on investment over 90 days.

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

Virtus Global Multi  vs.  Sprott Physical Gold

Virtus Global Multi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virtus Global Multi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Virtus Global is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Sprott Physical Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sprott Physical Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Sprott Physical 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 Virtus Global and Sprott Physical

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

The idea behind Virtus Global Multi and Sprott Physical Gold 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.