Correlation Between Contango ORE and Sandstorm Gold
Can any of the company-specific risk be diversified away by investing in both Contango ORE 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 Contango ORE and Sandstorm Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Contango ORE and Sandstorm Gold Ltd, you can compare the effects of market volatilities on Contango ORE 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 Contango ORE with a short position of Sandstorm Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Contango ORE and Sandstorm Gold.
Diversification Opportunities for Contango ORE and Sandstorm Gold
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Contango and Sandstorm is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Contango ORE and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm Gold and Contango ORE 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 Contango ORE 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 Contango ORE i.e., Contango ORE and Sandstorm Gold go up and down completely randomly.
Pair Corralation between Contango ORE and Sandstorm Gold
Given the investment horizon of 90 days Contango ORE is expected to under-perform the Sandstorm Gold. But the stock apears to be less risky and, when comparing its historical volatility, Contango ORE is 1.06 times less risky than Sandstorm Gold. The stock trades about -0.34 of its potential returns per unit of risk. The Sandstorm Gold Ltd is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 607.00 in Sandstorm Gold Ltd on August 27, 2024 and sell it today you would lose (22.00) from holding Sandstorm Gold Ltd or give up 3.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Contango ORE vs. Sandstorm Gold Ltd
Performance |
| Timeline |
| Contango ORE |
| Sandstorm Gold |
Contango ORE and Sandstorm Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Contango ORE and Sandstorm Gold
The main advantage of trading using opposite Contango ORE and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Contango ORE 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.| Contango ORE vs. Labrador Gold Corp | Contango ORE vs. Aurion Resources | Contango ORE vs. Puma Exploration | Contango ORE vs. Golden Star Resource |
| Sandstorm Gold vs. Franco Nevada | Sandstorm Gold vs. Royal Gold | Sandstorm Gold vs. Alamos Gold | Sandstorm Gold vs. Seabridge Gold |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |