Correlation Between Sprott Physical and Global X

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

By analyzing existing cross correlation between Sprott Physical Uranium and Global X Uranium, you can compare the effects of market volatilities on Sprott Physical and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Physical and Global X.

Diversification Opportunities for Sprott Physical and Global X

0.83

Correlation Coefficient

Sprott Physical  Global X

Very poor diversification

The 3 months correlation between Sprott and Global is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Physical Uranium and Global X Uranium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Uranium 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 Uranium are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Uranium has no effect on the direction of Sprott Physical i.e., Sprott Physical and Global X go up and down completely randomly.

Pair Corralation between Sprott Physical and Global X

Assuming the 90 days trading horizon Sprott Physical is expected to generate 3.45 times less return on investment than Global X. But when comparing it to its historical volatility, Sprott Physical Uranium is 1.05 times less risky than Global X. It trades about 0.12 of its potential returns per unit of risk. Global X Uranium is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest  2,537  in Global X Uranium on April 20, 2025 and sell it today you would earn a total of  2,063  from holding Global X Uranium or generate 81.32% return on investment over 90 days.

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

Sprott Physical Uranium  vs.  Global X Uranium

Sprott Physical Uranium

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Physical Uranium are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Sprott Physical displayed solid returns over the last few months and may actually be approaching a breakup point.

Global X Uranium

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Uranium are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Global X displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sprott Physical and Global X

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

The idea behind Sprott Physical Uranium and Global X Uranium 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.