Correlation Between Sandstorm Gold and GMS
Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and GMS 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 GMS 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 GMS Inc, you can compare the effects of market volatilities on Sandstorm Gold and GMS 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 GMS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and GMS.
Diversification Opportunities for Sandstorm Gold and GMS
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sandstorm and GMS is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and GMS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMS Inc 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 GMS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMS Inc has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and GMS go up and down completely randomly.
Pair Corralation between Sandstorm Gold and GMS
Given the investment horizon of 90 days Sandstorm Gold Ltd is expected to under-perform the GMS. In addition to that, Sandstorm Gold is 1.44 times more volatile than GMS Inc. It trades about -0.05 of its total potential returns per unit of risk. GMS Inc is currently generating about 0.23 per unit of volatility. If you would invest 9,127 in GMS Inc on August 31, 2024 and sell it today you would earn a total of 895.00 from holding GMS Inc or generate 9.81% 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. GMS Inc
Performance |
| Timeline |
| Sandstorm Gold |
| GMS Inc |
Sandstorm Gold and GMS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandstorm Gold and GMS
The main advantage of trading using opposite Sandstorm Gold and GMS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, GMS 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 GMS will offset losses from the drop in GMS's long position.| Sandstorm Gold vs. Franco Nevada | Sandstorm Gold vs. Alamos Gold | Sandstorm Gold vs. Seabridge Gold | Sandstorm Gold vs. Osisko Gold Ro |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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