Correlation Between Sandstorm Gold and Highway Holdings
Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and Highway Holdings 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 Highway Holdings 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 Highway Holdings Limited, you can compare the effects of market volatilities on Sandstorm Gold and Highway Holdings 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 Highway Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and Highway Holdings.
Diversification Opportunities for Sandstorm Gold and Highway Holdings
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sandstorm and Highway is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and Highway Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highway 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 Highway Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highway Holdings has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and Highway Holdings go up and down completely randomly.
Pair Corralation between Sandstorm Gold and Highway Holdings
Given the investment horizon of 90 days Sandstorm Gold is expected to generate 2.2 times less return on investment than Highway Holdings. But when comparing it to its historical volatility, Sandstorm Gold Ltd is 1.2 times less risky than Highway Holdings. It trades about 0.01 of its potential returns per unit of risk. Highway Holdings Limited is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 181.00 in Highway Holdings Limited on August 31, 2024 and sell it today you would earn a total of 10.00 from holding Highway Holdings Limited or generate 5.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.49% |
| Values | Daily Returns |
Sandstorm Gold Ltd vs. Highway Holdings Limited
Performance |
| Timeline |
| Sandstorm Gold |
| Highway Holdings |
Sandstorm Gold and Highway Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandstorm Gold and Highway Holdings
The main advantage of trading using opposite Sandstorm Gold and Highway Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, Highway Holdings 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 Highway Holdings will offset losses from the drop in Highway Holdings' long position.| Sandstorm Gold vs. Franco Nevada | Sandstorm Gold vs. Alamos Gold | Sandstorm Gold vs. Seabridge Gold | Sandstorm Gold vs. Wheaton Precious Metals |
| Highway Holdings vs. Deswell Industries | Highway Holdings vs. Euro Tech Holdings | Highway Holdings vs. China Natural Resources | Highway Holdings vs. Arts Way Manufacturing Co |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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