Correlation Between Barclays Capital and Sprott Physical

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

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

Diversification Opportunities for Barclays Capital and Sprott Physical

0.4

Correlation Coefficient

Barclays Capital  Sprott Physical

Very weak diversification

The 3 months correlation between Barclays and Sprott is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Barclays Capital 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 Barclays Capital 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 Barclays Capital 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 Barclays Capital i.e., Barclays Capital and Sprott Physical go up and down completely randomly.

Pair Corralation between Barclays Capital and Sprott Physical

If you would invest  1,682  in Sprott Physical Gold on March 17, 2024 and sell it today you would earn a total of  133.00  from holding Sprott Physical Gold or generate 7.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Barclays Capital  vs.  Sprott Physical Gold

Barclays Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barclays Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Barclays Capital is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Sprott Physical Gold

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Physical Gold are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Sprott Physical may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with Barclays Capital and Sprott Physical

The main advantage of trading using opposite Barclays Capital and Sprott Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays Capital 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 Barclays Capital 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.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.