Correlation Between Sandstorm Gold and I 80
Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and I 80 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 I 80 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 I 80 Gold Corp, you can compare the effects of market volatilities on Sandstorm Gold and I 80 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 I 80. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and I 80.
Diversification Opportunities for Sandstorm Gold and I 80
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sandstorm and IAUX is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and I 80 Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on I 80 Gold 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 I 80. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of I 80 Gold has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and I 80 go up and down completely randomly.
Pair Corralation between Sandstorm Gold and I 80
Given the investment horizon of 90 days Sandstorm Gold Ltd is expected to generate 0.18 times more return on investment than I 80. However, Sandstorm Gold Ltd is 5.5 times less risky than I 80. It trades about -0.11 of its potential returns per unit of risk. I 80 Gold Corp is currently generating about -0.06 per unit of risk. If you would invest 630.00 in Sandstorm Gold Ltd on August 25, 2024 and sell it today you would lose (45.00) from holding Sandstorm Gold Ltd or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sandstorm Gold Ltd vs. I 80 Gold Corp
Performance |
| Timeline |
| Sandstorm Gold |
| I 80 Gold |
Sandstorm Gold and I 80 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandstorm Gold and I 80
The main advantage of trading using opposite Sandstorm Gold and I 80 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, I 80 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 I 80 will offset losses from the drop in I 80's long position.| Sandstorm Gold vs. Franco Nevada | Sandstorm Gold vs. Royal Gold | Sandstorm Gold vs. Alamos Gold | Sandstorm Gold vs. Seabridge Gold |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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