Correlation Between Invesco SP and Sprott Active
Can any of the company-specific risk be diversified away by investing in both Invesco SP and Sprott Active 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 Invesco SP and Sprott Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco SP SmallCap and Sprott Active Metals, you can compare the effects of market volatilities on Invesco SP and Sprott Active 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 Invesco SP with a short position of Sprott Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco SP and Sprott Active.
Diversification Opportunities for Invesco SP and Sprott Active
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Invesco and Sprott is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Invesco SP SmallCap and Sprott Active Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Active Metals and Invesco SP 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 Invesco SP SmallCap are associated (or correlated) with Sprott Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Active Metals has no effect on the direction of Invesco SP i.e., Invesco SP and Sprott Active go up and down completely randomly.
Pair Corralation between Invesco SP and Sprott Active
Given the investment horizon of 90 days Invesco SP is expected to generate 3.98 times less return on investment than Sprott Active. But when comparing it to its historical volatility, Invesco SP SmallCap is 1.68 times less risky than Sprott Active. It trades about 0.05 of its potential returns per unit of risk. Sprott Active Metals is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,010 in Sprott Active Metals on September 2, 2025 and sell it today you would earn a total of 383.00 from holding Sprott Active Metals or generate 19.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.77% |
| Values | Daily Returns |
Invesco SP SmallCap vs. Sprott Active Metals
Performance |
| Timeline |
| Invesco SP SmallCap |
| Sprott Active Metals |
Invesco SP and Sprott Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco SP and Sprott Active
The main advantage of trading using opposite Invesco SP and Sprott Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco SP position performs unexpectedly, Sprott Active 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 Active will offset losses from the drop in Sprott Active's long position.| Invesco SP vs. Sprott Active Metals | Invesco SP vs. Direxion Daily Gold | Invesco SP vs. SPDR SP North | Invesco SP vs. Xtrackers RREEF Global |
| Sprott Active vs. Direxion Daily Gold | Sprott Active vs. SPDR SP North | Sprott Active vs. Xtrackers RREEF Global | Sprott Active vs. Direxion Daily Gold |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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