Correlation Between Sandstorm Gold and GE Vernova
Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and GE Vernova 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 GE Vernova 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 GE Vernova LLC, you can compare the effects of market volatilities on Sandstorm Gold and GE Vernova 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 GE Vernova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and GE Vernova.
Diversification Opportunities for Sandstorm Gold and GE Vernova
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sandstorm and GEV is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and GE Vernova LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GE Vernova LLC 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 GE Vernova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GE Vernova LLC has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and GE Vernova go up and down completely randomly.
Pair Corralation between Sandstorm Gold and GE Vernova
Given the investment horizon of 90 days Sandstorm Gold is expected to generate 11.0 times less return on investment than GE Vernova. But when comparing it to its historical volatility, Sandstorm Gold Ltd is 1.31 times less risky than GE Vernova. It trades about 0.02 of its potential returns per unit of risk. GE Vernova LLC is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 13,125 in GE Vernova LLC on September 2, 2024 and sell it today you would earn a total of 20,287 from holding GE Vernova LLC or generate 154.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 34.88% |
| Values | Daily Returns |
Sandstorm Gold Ltd vs. GE Vernova LLC
Performance |
| Timeline |
| Sandstorm Gold |
| GE Vernova LLC |
Sandstorm Gold and GE Vernova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandstorm Gold and GE Vernova
The main advantage of trading using opposite Sandstorm Gold and GE Vernova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, GE Vernova 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 GE Vernova will offset losses from the drop in GE Vernova's long position.| Sandstorm Gold vs. Fortitude Gold Corp | Sandstorm Gold vs. New Gold | Sandstorm Gold vs. Galiano Gold | Sandstorm Gold vs. GoldMining |
| GE Vernova vs. Sonos Inc | GE Vernova vs. JD Sports Fashion | GE Vernova vs. Boston Properties | GE Vernova vs. Mid Atlantic Home Health |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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