Correlation Between Sandstorm Gold and Above Food
Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and Above Food 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 Sandstorm Gold and Above Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sandstorm Gold Ltd and Above Food Ingredients, you can compare the effects of market volatilities on Sandstorm Gold and Above Food 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 Sandstorm Gold with a short position of Above Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and Above Food.
Diversification Opportunities for Sandstorm Gold and Above Food
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sandstorm and Above is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and Above Food Ingredients in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Above Food Ingredients and Sandstorm 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 Sandstorm Gold Ltd are associated (or correlated) with Above Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Above Food Ingredients has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and Above Food go up and down completely randomly.
Pair Corralation between Sandstorm Gold and Above Food
Given the investment horizon of 90 days Sandstorm Gold is expected to generate 51.21 times less return on investment than Above Food. But when comparing it to its historical volatility, Sandstorm Gold Ltd is 11.42 times less risky than Above Food. It trades about 0.02 of its potential returns per unit of risk. Above Food Ingredients is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5.50 in Above Food Ingredients on September 12, 2024 and sell it today you would lose (3.11) from holding Above Food Ingredients or give up 56.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 32.67% |
| Values | Daily Returns |
Sandstorm Gold Ltd vs. Above Food Ingredients
Performance |
| Timeline |
| Sandstorm Gold |
| Above Food Ingredients |
Sandstorm Gold and Above Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandstorm Gold and Above Food
The main advantage of trading using opposite Sandstorm Gold and Above Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, Above Food 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 Above Food will offset losses from the drop in Above Food's long position.| Sandstorm Gold vs. Franco Nevada | Sandstorm Gold vs. Royal Gold | Sandstorm Gold vs. Alamos Gold | Sandstorm Gold vs. Seabridge Gold |
| Above Food vs. Boyd Gaming | Above Food vs. BJs Restaurants | Above Food vs. Papaya Growth Opportunity | Above Food vs. Sandstorm Gold Ltd |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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