Correlation Between Dundee Precious and Sandstorm Gold
Can any of the company-specific risk be diversified away by investing in both Dundee Precious 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 Dundee Precious and Sandstorm Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dundee Precious Metals and Sandstorm Gold Ltd, you can compare the effects of market volatilities on Dundee Precious 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 Dundee Precious with a short position of Sandstorm Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dundee Precious and Sandstorm Gold.
Diversification Opportunities for Dundee Precious and Sandstorm Gold
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dundee and Sandstorm is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Dundee Precious Metals and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm Gold and Dundee Precious 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 Dundee Precious Metals 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 Dundee Precious i.e., Dundee Precious and Sandstorm Gold go up and down completely randomly.
Pair Corralation between Dundee Precious and Sandstorm Gold
Assuming the 90 days trading horizon Dundee Precious is expected to generate 8.23 times less return on investment than Sandstorm Gold. But when comparing it to its historical volatility, Dundee Precious Metals is 1.41 times less risky than Sandstorm Gold. It trades about 0.01 of its potential returns per unit of risk. Sandstorm Gold Ltd is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 767.00 in Sandstorm Gold Ltd on August 25, 2024 and sell it today you would earn a total of 51.00 from holding Sandstorm Gold Ltd or generate 6.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dundee Precious Metals vs. Sandstorm Gold Ltd
Performance |
| Timeline |
| Dundee Precious Metals |
| Sandstorm Gold |
Dundee Precious and Sandstorm Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dundee Precious and Sandstorm Gold
The main advantage of trading using opposite Dundee Precious and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dundee Precious 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.| Dundee Precious vs. Centerra Gold | Dundee Precious vs. SSR Mining | Dundee Precious vs. Alamos Gold | Dundee Precious vs. Endeavour Mining Corp |
| Sandstorm Gold vs. Osisko Gold Ro | Sandstorm Gold vs. Wheaton Precious Metals | Sandstorm Gold vs. Seabridge Gold | Sandstorm Gold vs. MAG Silver Corp |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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