Correlation Between Sandstorm Gold and National Vision
Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and National Vision 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 National Vision 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 National Vision Holdings, you can compare the effects of market volatilities on Sandstorm Gold and National Vision 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 National Vision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and National Vision.
Diversification Opportunities for Sandstorm Gold and National Vision
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sandstorm and National is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and National Vision Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Vision Holdings 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 National Vision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Vision Holdings has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and National Vision go up and down completely randomly.
Pair Corralation between Sandstorm Gold and National Vision
Given the investment horizon of 90 days Sandstorm Gold Ltd is expected to under-perform the National Vision. But the stock apears to be less risky and, when comparing its historical volatility, Sandstorm Gold Ltd is 1.01 times less risky than National Vision. The stock trades about -0.06 of its potential returns per unit of risk. The National Vision Holdings is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 996.00 in National Vision Holdings on August 27, 2024 and sell it today you would earn a total of 226.00 from holding National Vision Holdings or generate 22.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sandstorm Gold Ltd vs. National Vision Holdings
Performance |
| Timeline |
| Sandstorm Gold |
| National Vision Holdings |
Sandstorm Gold and National Vision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandstorm Gold and National Vision
The main advantage of trading using opposite Sandstorm Gold and National Vision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, National Vision 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 National Vision will offset losses from the drop in National Vision's long position.| Sandstorm Gold vs. Franco Nevada | Sandstorm Gold vs. Royal Gold | Sandstorm Gold vs. Alamos Gold | Sandstorm Gold vs. Seabridge Gold |
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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 Stocks Directory module to find actively traded stocks across global markets.
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