Correlation Between National Beverage and Sandstorm Gold
Can any of the company-specific risk be diversified away by investing in both National Beverage 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 National Beverage and Sandstorm Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Beverage Corp and Sandstorm Gold Ltd, you can compare the effects of market volatilities on National Beverage 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 National Beverage with a short position of Sandstorm Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Sandstorm Gold.
Diversification Opportunities for National Beverage and Sandstorm Gold
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Sandstorm is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage 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 National Beverage 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 National Beverage 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 National Beverage i.e., National Beverage and Sandstorm Gold go up and down completely randomly.
Pair Corralation between National Beverage and Sandstorm Gold
Given the investment horizon of 90 days National Beverage Corp is expected to generate 0.56 times more return on investment than Sandstorm Gold. However, National Beverage Corp is 1.8 times less risky than Sandstorm Gold. It trades about 0.28 of its potential returns per unit of risk. Sandstorm Gold Ltd is currently generating about -0.05 per unit of risk. If you would invest 4,519 in National Beverage Corp on August 31, 2024 and sell it today you would earn a total of 441.00 from holding National Beverage Corp or generate 9.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Beverage Corp vs. Sandstorm Gold Ltd
Performance |
| Timeline |
| National Beverage Corp |
| Sandstorm Gold |
National Beverage and Sandstorm Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Sandstorm Gold
The main advantage of trading using opposite National Beverage and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage 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.| National Beverage vs. Celsius Holdings | National Beverage vs. Monster Beverage Corp | National Beverage vs. Coca Cola Femsa SAB | National Beverage vs. Keurig Dr Pepper |
| Sandstorm Gold vs. Franco Nevada | Sandstorm Gold vs. Alamos Gold | Sandstorm Gold vs. Seabridge Gold | Sandstorm Gold vs. Osisko Gold Ro |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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