Correlation Between Coca Cola and Sandstorm Gold
Can any of the company-specific risk be diversified away by investing in both Coca Cola 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 Coca Cola and Sandstorm Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Coca Cola and Sandstorm Gold Ltd, you can compare the effects of market volatilities on Coca Cola 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 Coca Cola with a short position of Sandstorm Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and Sandstorm Gold.
Diversification Opportunities for Coca Cola and Sandstorm Gold
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Coca and Sandstorm is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm Gold and Coca Cola 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 The Coca Cola 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 Coca Cola i.e., Coca Cola and Sandstorm Gold go up and down completely randomly.
Pair Corralation between Coca Cola and Sandstorm Gold
Allowing for the 90-day total investment horizon The Coca Cola is expected to generate 0.3 times more return on investment than Sandstorm Gold. However, The Coca Cola is 3.29 times less risky than Sandstorm Gold. It trades about -0.12 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 6,592 in The Coca Cola on August 31, 2024 and sell it today you would lose (149.00) from holding The Coca Cola or give up 2.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. Sandstorm Gold Ltd
Performance |
| Timeline |
| Coca Cola |
| Sandstorm Gold |
Coca Cola and Sandstorm Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and Sandstorm Gold
The main advantage of trading using opposite Coca Cola and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola 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.| Coca Cola vs. Monster Beverage Corp | Coca Cola vs. RLJ Lodging Trust | Coca Cola vs. Aquagold International | Coca Cola vs. Stepstone Group |
| 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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