Correlation Between Summit Global and Sprott Focus
Can any of the company-specific risk be diversified away by investing in both Summit Global and Sprott Focus 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 Summit Global and Sprott Focus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Global Investments and Sprott Focus Trust, you can compare the effects of market volatilities on Summit Global and Sprott Focus 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 Summit Global with a short position of Sprott Focus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Global and Sprott Focus.
Diversification Opportunities for Summit Global and Sprott Focus
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Summit and Sprott is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Summit Global Investments and Sprott Focus Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Focus Trust and Summit 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 Summit Global Investments are associated (or correlated) with Sprott Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Focus Trust has no effect on the direction of Summit Global i.e., Summit Global and Sprott Focus go up and down completely randomly.
Pair Corralation between Summit Global and Sprott Focus
Assuming the 90 days horizon Summit Global is expected to generate 2.9 times less return on investment than Sprott Focus. But when comparing it to its historical volatility, Summit Global Investments is 1.63 times less risky than Sprott Focus. It trades about 0.07 of its potential returns per unit of risk. Sprott Focus Trust is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 780.00 in Sprott Focus Trust on August 20, 2025 and sell it today you would earn a total of 52.00 from holding Sprott Focus Trust or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Global Investments vs. Sprott Focus Trust
Performance |
| Timeline |
| Summit Global Investments |
| Sprott Focus Trust |
Summit Global and Sprott Focus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Global and Sprott Focus
The main advantage of trading using opposite Summit Global and Sprott Focus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Global position performs unexpectedly, Sprott Focus 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 Focus will offset losses from the drop in Sprott Focus' long position.| Summit Global vs. Sit Dividend Growth | Summit Global vs. Sit Dividend Growth | Summit Global vs. Dreyfus Opportunistic Small | Summit Global vs. Hennessy Equity And |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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