Correlation Between Magnite and Sandstorm Gold
Can any of the company-specific risk be diversified away by investing in both Magnite 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 Magnite and Sandstorm Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnite and Sandstorm Gold Ltd, you can compare the effects of market volatilities on Magnite 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 Magnite with a short position of Sandstorm Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnite and Sandstorm Gold.
Diversification Opportunities for Magnite and Sandstorm Gold
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magnite and Sandstorm is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Magnite and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm Gold and Magnite 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 Magnite 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 Magnite i.e., Magnite and Sandstorm Gold go up and down completely randomly.
Pair Corralation between Magnite and Sandstorm Gold
Given the investment horizon of 90 days Magnite is expected to generate 1.49 times more return on investment than Sandstorm Gold. However, Magnite is 1.49 times more volatile than Sandstorm Gold Ltd. It trades about 0.36 of its potential returns per unit of risk. Sandstorm Gold Ltd is currently generating about -0.07 per unit of risk. If you would invest 1,241 in Magnite on September 2, 2024 and sell it today you would earn a total of 438.00 from holding Magnite or generate 35.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnite vs. Sandstorm Gold Ltd
Performance |
| Timeline |
| Magnite |
| Sandstorm Gold |
Magnite and Sandstorm Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnite and Sandstorm Gold
The main advantage of trading using opposite Magnite and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnite 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.| Magnite vs. Deluxe | Magnite vs. Clear Channel Outdoor | Magnite vs. Entravision Communications | Magnite vs. Innovid Corp |
| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |