Correlation Between Altius Minerals and Sandstorm Gold
Can any of the company-specific risk be diversified away by investing in both Altius Minerals and Sandstorm Gold 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 Altius Minerals and Sandstorm Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altius Minerals and Sandstorm Gold Ltd, you can compare the effects of market volatilities on Altius Minerals and Sandstorm Gold 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 Altius Minerals with a short position of Sandstorm Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altius Minerals and Sandstorm Gold.
Diversification Opportunities for Altius Minerals and Sandstorm Gold
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Altius and Sandstorm is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Altius Minerals and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm Gold and Altius Minerals 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 Altius Minerals are associated (or correlated) with Sandstorm Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandstorm Gold has no effect on the direction of Altius Minerals i.e., Altius Minerals and Sandstorm Gold go up and down completely randomly.
Pair Corralation between Altius Minerals and Sandstorm Gold
Assuming the 90 days trading horizon Altius Minerals is expected to under-perform the Sandstorm Gold. But the stock apears to be less risky and, when comparing its historical volatility, Altius Minerals is 1.34 times less risky than Sandstorm Gold. The stock trades about -0.17 of its potential returns per unit of risk. The Sandstorm Gold Ltd is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 775.00 in Sandstorm Gold Ltd on September 19, 2024 and sell it today you would earn a total of 29.00 from holding Sandstorm Gold Ltd or generate 3.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altius Minerals vs. Sandstorm Gold Ltd
Performance |
| Timeline |
| Altius Minerals |
| Sandstorm Gold |
Altius Minerals and Sandstorm Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altius Minerals and Sandstorm Gold
The main advantage of trading using opposite Altius Minerals and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altius Minerals position performs unexpectedly, Sandstorm Gold 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 Sandstorm Gold will offset losses from the drop in Sandstorm Gold's long position.| Altius Minerals vs. Foraco International SA | Altius Minerals vs. Geodrill Limited | Altius Minerals vs. Bri Chem Corp |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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