Correlation Between Ivanhoe Energy and Sandstorm Gold
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Energy 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 Ivanhoe Energy and Sandstorm Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Energy and Sandstorm Gold Ltd, you can compare the effects of market volatilities on Ivanhoe Energy 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 Ivanhoe Energy with a short position of Sandstorm Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Energy and Sandstorm Gold.
Diversification Opportunities for Ivanhoe Energy and Sandstorm Gold
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ivanhoe and Sandstorm is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Energy and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm Gold and Ivanhoe Energy 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 Ivanhoe Energy 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 Ivanhoe Energy i.e., Ivanhoe Energy and Sandstorm Gold go up and down completely randomly.
Pair Corralation between Ivanhoe Energy and Sandstorm Gold
Assuming the 90 days horizon Ivanhoe Energy is expected to generate 1.09 times less return on investment than Sandstorm Gold. In addition to that, Ivanhoe Energy is 1.86 times more volatile than Sandstorm Gold Ltd. It trades about 0.01 of its total potential returns per unit of risk. Sandstorm Gold Ltd is currently generating about 0.02 per unit of volatility. If you would invest 699.00 in Sandstorm Gold Ltd on August 30, 2024 and sell it today you would earn a total of 113.00 from holding Sandstorm Gold Ltd or generate 16.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ivanhoe Energy vs. Sandstorm Gold Ltd
Performance |
| Timeline |
| Ivanhoe Energy |
| Sandstorm Gold |
Ivanhoe Energy and Sandstorm Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Energy and Sandstorm Gold
The main advantage of trading using opposite Ivanhoe Energy and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Energy 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.| Ivanhoe Energy vs. Questerre Energy | Ivanhoe Energy vs. Ivanhoe Mines | Ivanhoe Energy vs. Eastern Platinum Limited |
| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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