Correlation Between Sandstorm Gold and Eastern
Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and Eastern 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 Eastern 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 Eastern Co, you can compare the effects of market volatilities on Sandstorm Gold and Eastern 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 Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and Eastern.
Diversification Opportunities for Sandstorm Gold and Eastern
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sandstorm and Eastern is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and Eastern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern 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 Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and Eastern go up and down completely randomly.
Pair Corralation between Sandstorm Gold and Eastern
Given the investment horizon of 90 days Sandstorm Gold is expected to generate 3.61 times less return on investment than Eastern. But when comparing it to its historical volatility, Sandstorm Gold Ltd is 1.29 times less risky than Eastern. It trades about 0.02 of its potential returns per unit of risk. Eastern Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,662 in Eastern Co on August 31, 2024 and sell it today you would earn a total of 1,210 from holding Eastern Co or generate 72.8% 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. Eastern Co
Performance |
| Timeline |
| Sandstorm Gold |
| Eastern |
Sandstorm Gold and Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandstorm Gold and Eastern
The main advantage of trading using opposite Sandstorm Gold and Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, Eastern 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 Eastern will offset losses from the drop in Eastern's long position.| Sandstorm Gold vs. Franco Nevada | Sandstorm Gold vs. Alamos Gold | Sandstorm Gold vs. Seabridge Gold | Sandstorm Gold vs. Osisko Gold Ro |
| Eastern vs. Timken Company | Eastern vs. Lincoln Electric Holdings | Eastern vs. Hillman Solutions Corp | Eastern vs. Kennametal |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |