Correlation Between Sandstorm Gold and Contango ORE
Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and Contango ORE 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 Contango ORE 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 Contango ORE, you can compare the effects of market volatilities on Sandstorm Gold and Contango ORE 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 Contango ORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and Contango ORE.
Diversification Opportunities for Sandstorm Gold and Contango ORE
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sandstorm and Contango is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and Contango ORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contango ORE 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 Contango ORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contango ORE has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and Contango ORE go up and down completely randomly.
Pair Corralation between Sandstorm Gold and Contango ORE
Given the investment horizon of 90 days Sandstorm Gold Ltd is expected to generate 0.53 times more return on investment than Contango ORE. However, Sandstorm Gold Ltd is 1.87 times less risky than Contango ORE. It trades about 0.03 of its potential returns per unit of risk. Contango ORE is currently generating about -0.02 per unit of risk. If you would invest 493.00 in Sandstorm Gold Ltd on November 1, 2024 and sell it today you would earn a total of 101.00 from holding Sandstorm Gold Ltd or generate 20.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sandstorm Gold Ltd vs. Contango ORE
Performance |
| Timeline |
| Sandstorm Gold |
| Contango ORE |
Sandstorm Gold and Contango ORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandstorm Gold and Contango ORE
The main advantage of trading using opposite Sandstorm Gold and Contango ORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, Contango ORE 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 Contango ORE will offset losses from the drop in Contango ORE's long position.| Sandstorm Gold vs. Franco Nevada | Sandstorm Gold vs. Royal Gold | Sandstorm Gold vs. Alamos Gold | Sandstorm Gold vs. Seabridge Gold |
| Contango ORE vs. First Guaranty Bancshares | Contango ORE vs. Glen Burnie Bancorp | Contango ORE vs. Princeton Capital |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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