Correlation Between Eldorado Gold and Sandstorm Gold
Can any of the company-specific risk be diversified away by investing in both Eldorado Gold 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 Eldorado Gold and Sandstorm Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eldorado Gold Corp and Sandstorm Gold Ltd, you can compare the effects of market volatilities on Eldorado Gold 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 Eldorado Gold with a short position of Sandstorm Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and Sandstorm Gold.
Diversification Opportunities for Eldorado Gold and Sandstorm Gold
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eldorado and Sandstorm is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm Gold and Eldorado Gold 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 Eldorado Gold Corp 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 Eldorado Gold i.e., Eldorado Gold and Sandstorm Gold go up and down completely randomly.
Pair Corralation between Eldorado Gold and Sandstorm Gold
Considering the 90-day investment horizon Eldorado Gold Corp is expected to under-perform the Sandstorm Gold. In addition to that, Eldorado Gold is 1.13 times more volatile than Sandstorm Gold Ltd. It trades about -0.03 of its total potential returns per unit of risk. Sandstorm Gold Ltd is currently generating about -0.01 per unit of volatility. If you would invest 608.00 in Sandstorm Gold Ltd on November 1, 2024 and sell it today you would lose (14.00) from holding Sandstorm Gold Ltd or give up 2.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eldorado Gold Corp vs. Sandstorm Gold Ltd
Performance |
| Timeline |
| Eldorado Gold Corp |
| Sandstorm Gold |
Eldorado Gold and Sandstorm Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eldorado Gold and Sandstorm Gold
The main advantage of trading using opposite Eldorado Gold and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado Gold 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.| Eldorado Gold vs. IAMGold | Eldorado Gold vs. Kinross Gold | Eldorado Gold vs. Agnico Eagle Mines | Eldorado Gold vs. Gold Fields Ltd |
| 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |