Correlation Between Sandstorm Gold and K92 Mining
Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and K92 Mining 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 K92 Mining 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 K92 Mining, you can compare the effects of market volatilities on Sandstorm Gold and K92 Mining 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 K92 Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and K92 Mining.
Diversification Opportunities for Sandstorm Gold and K92 Mining
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sandstorm and K92 is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and K92 Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K92 Mining 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 K92 Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K92 Mining has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and K92 Mining go up and down completely randomly.
Pair Corralation between Sandstorm Gold and K92 Mining
Given the investment horizon of 90 days Sandstorm Gold is expected to generate 1.44 times less return on investment than K92 Mining. But when comparing it to its historical volatility, Sandstorm Gold Ltd is 1.4 times less risky than K92 Mining. It trades about 0.03 of its potential returns per unit of risk. K92 Mining is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 532.00 in K92 Mining on November 9, 2024 and sell it today you would earn a total of 178.00 from holding K92 Mining or generate 33.46% 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. K92 Mining
Performance |
| Timeline |
| Sandstorm Gold |
| K92 Mining |
Sandstorm Gold and K92 Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandstorm Gold and K92 Mining
The main advantage of trading using opposite Sandstorm Gold and K92 Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, K92 Mining 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 K92 Mining will offset losses from the drop in K92 Mining'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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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