Correlation Between Sandstorm Gold and Kinross Gold
Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and Kinross Gold 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 Kinross Gold 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 Kinross Gold, you can compare the effects of market volatilities on Sandstorm Gold and Kinross Gold 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 Kinross Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and Kinross Gold.
Diversification Opportunities for Sandstorm Gold and Kinross Gold
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sandstorm and Kinross is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and Kinross Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinross 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 Kinross Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinross Gold has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and Kinross Gold go up and down completely randomly.
Pair Corralation between Sandstorm Gold and Kinross Gold
Given the investment horizon of 90 days Sandstorm Gold is expected to generate 4.73 times less return on investment than Kinross Gold. But when comparing it to its historical volatility, Sandstorm Gold Ltd is 1.05 times less risky than Kinross Gold. It trades about 0.02 of its potential returns per unit of risk. Kinross Gold is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 418.00 in Kinross Gold on August 27, 2024 and sell it today you would earn a total of 604.00 from holding Kinross Gold or generate 144.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sandstorm Gold Ltd vs. Kinross Gold
Performance |
| Timeline |
| Sandstorm Gold |
| Kinross Gold |
Sandstorm Gold and Kinross Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandstorm Gold and Kinross Gold
The main advantage of trading using opposite Sandstorm Gold and Kinross Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, Kinross Gold 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 Kinross Gold will offset losses from the drop in Kinross Gold's long position.| Sandstorm Gold vs. Franco Nevada | Sandstorm Gold vs. Royal Gold | Sandstorm Gold vs. Alamos Gold | Sandstorm Gold vs. Seabridge Gold |
| Kinross Gold vs. Pan American Silver | Kinross Gold vs. Newmont Goldcorp Corp | Kinross Gold vs. Wheaton Precious Metals | Kinross Gold vs. Franco Nevada |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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