Correlation Between Sandstorm Gold and Genus Plc
Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and Genus Plc 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 Genus Plc 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 Genus plc, you can compare the effects of market volatilities on Sandstorm Gold and Genus Plc 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 Genus Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and Genus Plc.
Diversification Opportunities for Sandstorm Gold and Genus Plc
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sandstorm and Genus is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and Genus plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genus plc 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 Genus Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genus plc has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and Genus Plc go up and down completely randomly.
Pair Corralation between Sandstorm Gold and Genus Plc
Given the investment horizon of 90 days Sandstorm Gold Ltd is expected to generate 1.51 times more return on investment than Genus Plc. However, Sandstorm Gold is 1.51 times more volatile than Genus plc. It trades about 0.05 of its potential returns per unit of risk. Genus plc is currently generating about -0.07 per unit of risk. If you would invest 484.00 in Sandstorm Gold Ltd on September 12, 2024 and sell it today you would earn a total of 102.00 from holding Sandstorm Gold Ltd or generate 21.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Sandstorm Gold Ltd vs. Genus plc
Performance |
| Timeline |
| Sandstorm Gold |
| Genus plc |
Sandstorm Gold and Genus Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandstorm Gold and Genus Plc
The main advantage of trading using opposite Sandstorm Gold and Genus Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, Genus Plc 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 Genus Plc will offset losses from the drop in Genus Plc's long position.| Sandstorm Gold vs. Franco Nevada | Sandstorm Gold vs. Royal Gold | Sandstorm Gold vs. Seabridge Gold | Sandstorm Gold vs. Pan American Silver |
| Genus Plc vs. Marfrig Global Foods | Genus Plc vs. Aldel Financial II | Genus Plc vs. Sandstorm Gold Ltd | Genus Plc vs. Enersys |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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