Correlation Between Teucrium Wheat and Sprott Physical

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

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

Diversification Opportunities for Teucrium Wheat and Sprott Physical

0.49

Correlation Coefficient

Teucrium Wheat  Sprott Physical

Very weak diversification

The 3 months correlation between Teucrium and Sprott is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Teucrium Wheat and Sprott Physical Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Physical Silver and Teucrium Wheat 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 Teucrium Wheat 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 Silver has no effect on the direction of Teucrium Wheat i.e., Teucrium Wheat and Sprott Physical go up and down completely randomly.

Pair Corralation between Teucrium Wheat and Sprott Physical

Given the investment horizon of 90 days Teucrium Wheat is expected to under-perform the Sprott Physical. But the etf apears to be less risky and, when comparing its historical volatility, Teucrium Wheat is 1.96 times less risky than Sprott Physical. The etf trades about -0.37 of its potential returns per unit of risk. The Sprott Physical Silver is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest  1,035  in Sprott Physical Silver on September 22, 2024 and sell it today you would lose (47.00) from holding Sprott Physical Silver or give up 4.54% of portfolio value over 90 days.

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

Teucrium Wheat  vs.  Sprott Physical Silver

Teucrium Wheat

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Teucrium Wheat has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Sprott Physical Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sprott Physical Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Sprott Physical is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Teucrium Wheat and Sprott Physical

The main advantage of trading using opposite Teucrium Wheat and Sprott Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teucrium Wheat 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 Teucrium Wheat and Sprott Physical Silver 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.