Correlation Between Sandstorm Gold and Capital Clean
Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and Capital Clean 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 Capital Clean 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 Capital Clean Energy, you can compare the effects of market volatilities on Sandstorm Gold and Capital Clean 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 Capital Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and Capital Clean.
Diversification Opportunities for Sandstorm Gold and Capital Clean
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sandstorm and Capital is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and Capital Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Clean Energy 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 Capital Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Clean Energy has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and Capital Clean go up and down completely randomly.
Pair Corralation between Sandstorm Gold and Capital Clean
Given the investment horizon of 90 days Sandstorm Gold Ltd is expected to under-perform the Capital Clean. In addition to that, Sandstorm Gold is 1.92 times more volatile than Capital Clean Energy. It trades about -0.06 of its total potential returns per unit of risk. Capital Clean Energy is currently generating about -0.06 per unit of volatility. If you would invest 1,870 in Capital Clean Energy on September 1, 2024 and sell it today you would lose (40.00) from holding Capital Clean Energy or give up 2.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sandstorm Gold Ltd vs. Capital Clean Energy
Performance |
| Timeline |
| Sandstorm Gold |
| Capital Clean Energy |
Sandstorm Gold and Capital Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandstorm Gold and Capital Clean
The main advantage of trading using opposite Sandstorm Gold and Capital Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, Capital Clean 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 Capital Clean will offset losses from the drop in Capital Clean's long position.| Sandstorm Gold vs. Fortitude Gold Corp | Sandstorm Gold vs. New Gold | Sandstorm Gold vs. Galiano Gold | Sandstorm Gold vs. GoldMining |
| Capital Clean vs. Old Republic International | Capital Clean vs. Hafnia Limited | Capital Clean vs. Mesa Air Group | Capital Clean vs. The Hanover Insurance |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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