Correlation Between K92 Mining and Sandstorm Gold
Can any of the company-specific risk be diversified away by investing in both K92 Mining 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 K92 Mining and Sandstorm Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between K92 Mining and Sandstorm Gold Ltd, you can compare the effects of market volatilities on K92 Mining 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 K92 Mining with a short position of Sandstorm Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of K92 Mining and Sandstorm Gold.
Diversification Opportunities for K92 Mining and Sandstorm Gold
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between K92 and Sandstorm is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding K92 Mining and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm Gold and K92 Mining 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 K92 Mining 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 K92 Mining i.e., K92 Mining and Sandstorm Gold go up and down completely randomly.
Pair Corralation between K92 Mining and Sandstorm Gold
Assuming the 90 days horizon K92 Mining is expected to generate 1.0 times more return on investment than Sandstorm Gold. However, K92 Mining is 1.0 times more volatile than Sandstorm Gold Ltd. It trades about 0.04 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 657.00 in K92 Mining on August 27, 2024 and sell it today you would earn a total of 11.00 from holding K92 Mining or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
K92 Mining vs. Sandstorm Gold Ltd
Performance |
| Timeline |
| K92 Mining |
| Sandstorm Gold |
K92 Mining and Sandstorm Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K92 Mining and Sandstorm Gold
The main advantage of trading using opposite K92 Mining and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K92 Mining 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.| K92 Mining vs. I 80 Gold Corp | K92 Mining vs. Equinox Gold Corp | K92 Mining vs. Contango ORE | K92 Mining vs. Orla Mining |
| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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