Correlation Between Sprott Physical and EERN

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

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

Diversification Opportunities for Sprott Physical and EERN

0.0

Correlation Coefficient

Sprott Physical  EERN

Pay attention - limited upside

The 3 months correlation between Sprott and EERN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Physical Platinum and EERN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EERN and Sprott Physical 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 Physical Platinum are associated (or correlated) with EERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EERN has no effect on the direction of Sprott Physical i.e., Sprott Physical and EERN go up and down completely randomly.

Pair Corralation between Sprott Physical and EERN

If you would invest  961.00  in Sprott Physical Platinum on January 24, 2024 and sell it today you would earn a total of  2.00  from holding Sprott Physical Platinum or generate 0.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sprott Physical Platinum  vs.  EERN

Sprott Physical Platinum

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Physical Platinum are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Sprott Physical is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

EERN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EERN has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, EERN is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Sprott Physical and EERN

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

The idea behind Sprott Physical Platinum and EERN 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.