Correlation Between Brunswick and Sandstorm Gold
Can any of the company-specific risk be diversified away by investing in both Brunswick 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 Brunswick and Sandstorm Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brunswick and Sandstorm Gold Ltd, you can compare the effects of market volatilities on Brunswick 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 Brunswick with a short position of Sandstorm Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brunswick and Sandstorm Gold.
Diversification Opportunities for Brunswick and Sandstorm Gold
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Brunswick and Sandstorm is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Brunswick and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm Gold and Brunswick 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 Brunswick 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 Brunswick i.e., Brunswick and Sandstorm Gold go up and down completely randomly.
Pair Corralation between Brunswick and Sandstorm Gold
Allowing for the 90-day total investment horizon Brunswick is expected to under-perform the Sandstorm Gold. But the stock apears to be less risky and, when comparing its historical volatility, Brunswick is 1.1 times less risky than Sandstorm Gold. The stock trades about -0.02 of its potential returns per unit of risk. The Sandstorm Gold Ltd is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 498.00 in Sandstorm Gold Ltd on August 25, 2024 and sell it today you would earn a total of 87.00 from holding Sandstorm Gold Ltd or generate 17.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brunswick vs. Sandstorm Gold Ltd
Performance |
| Timeline |
| Brunswick |
| Sandstorm Gold |
Brunswick and Sandstorm Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brunswick and Sandstorm Gold
The main advantage of trading using opposite Brunswick and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brunswick 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.| Brunswick vs. MCBC Holdings | Brunswick vs. Winnebago Industries | Brunswick vs. LCI Industries | Brunswick vs. Thor Industries |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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