Correlation Between Sandstorm Gold and Jeld Wen
Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and Jeld Wen 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 Jeld Wen 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 Jeld Wen Holding, you can compare the effects of market volatilities on Sandstorm Gold and Jeld Wen 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 Jeld Wen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and Jeld Wen.
Diversification Opportunities for Sandstorm Gold and Jeld Wen
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sandstorm and Jeld is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and Jeld Wen Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeld Wen Holding 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 Jeld Wen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeld Wen Holding has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and Jeld Wen go up and down completely randomly.
Pair Corralation between Sandstorm Gold and Jeld Wen
Given the investment horizon of 90 days Sandstorm Gold Ltd is expected to generate 0.37 times more return on investment than Jeld Wen. However, Sandstorm Gold Ltd is 2.69 times less risky than Jeld Wen. It trades about -0.05 of its potential returns per unit of risk. Jeld Wen Holding is currently generating about -0.12 per unit of risk. If you would invest 606.00 in Sandstorm Gold Ltd on August 31, 2024 and sell it today you would lose (23.00) from holding Sandstorm Gold Ltd or give up 3.8% 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. Jeld Wen Holding
Performance |
| Timeline |
| Sandstorm Gold |
| Jeld Wen Holding |
Sandstorm Gold and Jeld Wen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandstorm Gold and Jeld Wen
The main advantage of trading using opposite Sandstorm Gold and Jeld Wen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, Jeld Wen 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 Jeld Wen will offset losses from the drop in Jeld Wen'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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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