Correlation Between Fluent and Sandstorm Gold
Can any of the company-specific risk be diversified away by investing in both Fluent 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 Fluent and Sandstorm Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fluent Inc and Sandstorm Gold Ltd, you can compare the effects of market volatilities on Fluent 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 Fluent with a short position of Sandstorm Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluent and Sandstorm Gold.
Diversification Opportunities for Fluent and Sandstorm Gold
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fluent and Sandstorm is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Fluent Inc and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm Gold and Fluent 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 Fluent Inc 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 Fluent i.e., Fluent and Sandstorm Gold go up and down completely randomly.
Pair Corralation between Fluent and Sandstorm Gold
Given the investment horizon of 90 days Fluent Inc is expected to under-perform the Sandstorm Gold. In addition to that, Fluent is 1.58 times more volatile than Sandstorm Gold Ltd. It trades about -0.05 of its total potential returns per unit of risk. Sandstorm Gold Ltd is currently generating about -0.06 per unit of volatility. If you would invest 605.00 in Sandstorm Gold Ltd on September 1, 2024 and sell it today you would lose (26.00) from holding Sandstorm Gold Ltd or give up 4.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fluent Inc vs. Sandstorm Gold Ltd
Performance |
| Timeline |
| Fluent Inc |
| Sandstorm Gold |
Fluent and Sandstorm Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fluent and Sandstorm Gold
The main advantage of trading using opposite Fluent and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluent 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.The idea behind Fluent Inc and Sandstorm Gold Ltd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sandstorm Gold vs. Fortitude Gold Corp | Sandstorm Gold vs. New Gold | Sandstorm Gold vs. Galiano Gold | Sandstorm Gold vs. GoldMining |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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