Correlation Between Boston Beer and Sandstorm Gold
Can any of the company-specific risk be diversified away by investing in both Boston Beer 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 Boston Beer and Sandstorm Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Beer and Sandstorm Gold Ltd, you can compare the effects of market volatilities on Boston Beer 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 Boston Beer with a short position of Sandstorm Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and Sandstorm Gold.
Diversification Opportunities for Boston Beer and Sandstorm Gold
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Boston and Sandstorm is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm Gold and Boston Beer 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 Boston Beer 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 Boston Beer i.e., Boston Beer and Sandstorm Gold go up and down completely randomly.
Pair Corralation between Boston Beer and Sandstorm Gold
Considering the 90-day investment horizon Boston Beer is expected to under-perform the Sandstorm Gold. In addition to that, Boston Beer is 1.03 times more volatile than Sandstorm Gold Ltd. It trades about -0.01 of its total potential returns per unit of risk. Sandstorm Gold Ltd is currently generating about 0.03 per unit of volatility. If you would invest 507.00 in Sandstorm Gold Ltd on September 12, 2024 and sell it today you would earn a total of 59.00 from holding Sandstorm Gold Ltd or generate 11.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Beer vs. Sandstorm Gold Ltd
Performance |
| Timeline |
| Boston Beer |
| Sandstorm Gold |
Boston Beer and Sandstorm Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and Sandstorm Gold
The main advantage of trading using opposite Boston Beer and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer 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.| Boston Beer vs. Anheuser Busch Inbev | Boston Beer vs. Molson Coors Beverage | Boston Beer vs. Heineken NV | Boston Beer vs. Ambev SA ADR |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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