Correlation Between Liberty Gold and Sandstorm Gold
Can any of the company-specific risk be diversified away by investing in both Liberty Gold 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 Liberty Gold and Sandstorm Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Gold Corp and Sandstorm Gold Ltd, you can compare the effects of market volatilities on Liberty Gold 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 Liberty Gold with a short position of Sandstorm Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Gold and Sandstorm Gold.
Diversification Opportunities for Liberty Gold and Sandstorm Gold
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Liberty and Sandstorm is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Gold Corp and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm Gold and Liberty Gold 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 Liberty Gold Corp 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 Liberty Gold i.e., Liberty Gold and Sandstorm Gold go up and down completely randomly.
Pair Corralation between Liberty Gold and Sandstorm Gold
Assuming the 90 days horizon Liberty Gold is expected to generate 10.82 times less return on investment than Sandstorm Gold. In addition to that, Liberty Gold is 1.91 times more volatile than Sandstorm Gold Ltd. It trades about 0.0 of its total potential returns per unit of risk. Sandstorm Gold Ltd is currently generating about 0.04 per unit of volatility. If you would invest 481.00 in Sandstorm Gold Ltd on November 19, 2024 and sell it today you would earn a total of 156.00 from holding Sandstorm Gold Ltd or generate 32.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Gold Corp vs. Sandstorm Gold Ltd
Performance |
| Timeline |
| Liberty Gold Corp |
| Sandstorm Gold |
Liberty Gold and Sandstorm Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Gold and Sandstorm Gold
The main advantage of trading using opposite Liberty Gold and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Gold 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.| Liberty Gold vs. Rio2 Limited | Liberty Gold vs. Aurion Resources | Liberty Gold vs. Norsemont Mining | Liberty Gold vs. Minaurum Gold |
| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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