Correlation Between Sandstorm Gold and Jacobs Solutions
Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and Jacobs Solutions 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 Jacobs Solutions 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 Jacobs Solutions, you can compare the effects of market volatilities on Sandstorm Gold and Jacobs Solutions 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 Jacobs Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and Jacobs Solutions.
Diversification Opportunities for Sandstorm Gold and Jacobs Solutions
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sandstorm and Jacobs is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and Jacobs Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacobs Solutions 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 Jacobs Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacobs Solutions has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and Jacobs Solutions go up and down completely randomly.
Pair Corralation between Sandstorm Gold and Jacobs Solutions
Given the investment horizon of 90 days Sandstorm Gold is expected to generate 1.58 times less return on investment than Jacobs Solutions. In addition to that, Sandstorm Gold is 1.68 times more volatile than Jacobs Solutions. It trades about 0.03 of its total potential returns per unit of risk. Jacobs Solutions is currently generating about 0.08 per unit of volatility. If you would invest 9,564 in Jacobs Solutions on September 2, 2024 and sell it today you would earn a total of 4,559 from holding Jacobs Solutions or generate 47.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sandstorm Gold Ltd vs. Jacobs Solutions
Performance |
| Timeline |
| Sandstorm Gold |
| Jacobs Solutions |
Sandstorm Gold and Jacobs Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandstorm Gold and Jacobs Solutions
The main advantage of trading using opposite Sandstorm Gold and Jacobs Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, Jacobs Solutions 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 Jacobs Solutions will offset losses from the drop in Jacobs Solutions' long position.| Sandstorm Gold vs. Fortitude Gold Corp | Sandstorm Gold vs. New Gold | Sandstorm Gold vs. Galiano Gold | Sandstorm Gold vs. GoldMining |
| Jacobs Solutions vs. KBR Inc | Jacobs Solutions vs. Tetra Tech | Jacobs Solutions vs. Fluor | Jacobs Solutions vs. Topbuild Corp |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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