Correlation Between Sandstorm Gold and Fortuna Silver
Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and Fortuna Silver 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 Fortuna Silver 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 Fortuna Silver Mines, you can compare the effects of market volatilities on Sandstorm Gold and Fortuna Silver 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 Fortuna Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and Fortuna Silver.
Diversification Opportunities for Sandstorm Gold and Fortuna Silver
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sandstorm and Fortuna is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and Fortuna Silver Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortuna Silver Mines 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 Fortuna Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortuna Silver Mines has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and Fortuna Silver go up and down completely randomly.
Pair Corralation between Sandstorm Gold and Fortuna Silver
Given the investment horizon of 90 days Sandstorm Gold Ltd is expected to generate 1.12 times more return on investment than Fortuna Silver. However, Sandstorm Gold is 1.12 times more volatile than Fortuna Silver Mines. It trades about -0.06 of its potential returns per unit of risk. Fortuna Silver Mines is currently generating about -0.1 per unit of risk. If you would invest 607.00 in Sandstorm Gold Ltd on August 28, 2024 and sell it today you would lose (25.00) from holding Sandstorm Gold Ltd or give up 4.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sandstorm Gold Ltd vs. Fortuna Silver Mines
Performance |
| Timeline |
| Sandstorm Gold |
| Fortuna Silver Mines |
Sandstorm Gold and Fortuna Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandstorm Gold and Fortuna Silver
The main advantage of trading using opposite Sandstorm Gold and Fortuna Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, Fortuna Silver 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 Fortuna Silver will offset losses from the drop in Fortuna Silver's long position.| Sandstorm Gold vs. Franco Nevada | Sandstorm Gold vs. Royal Gold | Sandstorm Gold vs. Alamos Gold | Sandstorm Gold vs. Seabridge Gold |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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