Correlation Between Inflection Point and Sandstorm Gold
Can any of the company-specific risk be diversified away by investing in both Inflection Point 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 Inflection Point and Sandstorm Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inflection Point Acquisition and Sandstorm Gold Ltd, you can compare the effects of market volatilities on Inflection Point 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 Inflection Point with a short position of Sandstorm Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflection Point and Sandstorm Gold.
Diversification Opportunities for Inflection Point and Sandstorm Gold
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Inflection and Sandstorm is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Inflection Point Acquisition and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm Gold and Inflection Point 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 Inflection Point Acquisition 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 Inflection Point i.e., Inflection Point and Sandstorm Gold go up and down completely randomly.
Pair Corralation between Inflection Point and Sandstorm Gold
Assuming the 90 days horizon Inflection Point is expected to generate 2.25 times less return on investment than Sandstorm Gold. But when comparing it to its historical volatility, Inflection Point Acquisition is 8.51 times less risky than Sandstorm Gold. It trades about 0.13 of its potential returns per unit of risk. Sandstorm Gold Ltd is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 544.00 in Sandstorm Gold Ltd on September 2, 2024 and sell it today you would earn a total of 35.00 from holding Sandstorm Gold Ltd or generate 6.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inflection Point Acquisition vs. Sandstorm Gold Ltd
Performance |
| Timeline |
| Inflection Point Acq |
| Sandstorm Gold |
Inflection Point and Sandstorm Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inflection Point and Sandstorm Gold
The main advantage of trading using opposite Inflection Point and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflection Point 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.| Inflection Point vs. Kinsale Capital Group | Inflection Point vs. GoHealth | Inflection Point vs. Stratasys | Inflection Point vs. NI Holdings |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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