Correlation Between Sandstorm Gold and Liberty Gold
Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and Liberty 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 Liberty 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 Liberty Gold Corp, you can compare the effects of market volatilities on Sandstorm Gold and Liberty 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 Liberty Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and Liberty Gold.
Diversification Opportunities for Sandstorm Gold and Liberty Gold
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sandstorm and Liberty is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and Liberty Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Gold Corp 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 Liberty Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Gold Corp has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and Liberty Gold go up and down completely randomly.
Pair Corralation between Sandstorm Gold and Liberty Gold
Given the investment horizon of 90 days Sandstorm Gold Ltd is expected to generate 0.67 times more return on investment than Liberty Gold. However, Sandstorm Gold Ltd is 1.49 times less risky than Liberty Gold. It trades about -0.06 of its potential returns per unit of risk. Liberty Gold Corp is currently generating about -0.21 per unit of risk. If you would invest 607.00 in Sandstorm Gold Ltd on August 28, 2024 and sell it today you would lose (27.00) from holding Sandstorm Gold Ltd or give up 4.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sandstorm Gold Ltd vs. Liberty Gold Corp
Performance |
| Timeline |
| Sandstorm Gold |
| Liberty Gold Corp |
Sandstorm Gold and Liberty Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandstorm Gold and Liberty Gold
The main advantage of trading using opposite Sandstorm Gold and Liberty Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, Liberty 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 Liberty Gold will offset losses from the drop in Liberty Gold's long position.| Sandstorm Gold vs. Franco Nevada | Sandstorm Gold vs. Royal Gold | Sandstorm Gold vs. Alamos Gold | Sandstorm Gold vs. Seabridge Gold |
| Liberty Gold vs. Rio2 Limited | Liberty Gold vs. Aurion Resources | Liberty Gold vs. Norsemont Mining | Liberty Gold vs. Minaurum Gold |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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