Correlation Between Sandstorm Gold and Better Home
Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and Better Home 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 Better Home 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 Better Home Finance, you can compare the effects of market volatilities on Sandstorm Gold and Better Home 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 Better Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and Better Home.
Diversification Opportunities for Sandstorm Gold and Better Home
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sandstorm and Better is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and Better Home Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Better Home Finance 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 Better Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Better Home Finance has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and Better Home go up and down completely randomly.
Pair Corralation between Sandstorm Gold and Better Home
Given the investment horizon of 90 days Sandstorm Gold is expected to generate 14.16 times less return on investment than Better Home. But when comparing it to its historical volatility, Sandstorm Gold Ltd is 6.56 times less risky than Better Home. It trades about 0.13 of its potential returns per unit of risk. Better Home Finance is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 8.00 in Better Home Finance on September 13, 2024 and sell it today you would earn a total of 3.00 from holding Better Home Finance or generate 37.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 50.0% |
| Values | Daily Returns |
Sandstorm Gold Ltd vs. Better Home Finance
Performance |
| Timeline |
| Sandstorm Gold |
| Better Home Finance |
Sandstorm Gold and Better Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandstorm Gold and Better Home
The main advantage of trading using opposite Sandstorm Gold and Better Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, Better Home 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 Better Home will offset losses from the drop in Better Home's long position.| Sandstorm Gold vs. Fortitude Gold Corp | Sandstorm Gold vs. New Gold | Sandstorm Gold vs. Galiano Gold | Sandstorm Gold vs. GoldMining |
| Better Home vs. Cincinnati Financial | Better Home vs. Trupanion | Better Home vs. ICC Holdings | Better Home vs. Stepstone Group |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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