This seems at odds with conventional financial theory of diversification. $PSLV is considered a mix of physical and securitized silver trading. Intuitively, one would think that this mix of assets would help offset the risk of the other. Moreover, $SLV could be more market efficient since this ETF does not deal with physical assets and their associated costs such as: storage, delivery and depreciation.

This is my take on you question.

I believe that sometimes silver is an over-looked commodity. It is a valuable currency that has industrial applications.

As for the $PSLV, this is a smart way to hedge your risk since there is a currency backing. However, ETFs are always subject to market fluctuations.

This is a great way to diversify your risk and gain more exposure to the internet of silver. Good read and solid recommendations.