Correlation Between Sandstorm Gold and MF International
Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and MF International 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 MF International 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 mF International Limited, you can compare the effects of market volatilities on Sandstorm Gold and MF International 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 MF International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and MF International.
Diversification Opportunities for Sandstorm Gold and MF International
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sandstorm and MFI is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and mF International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mF International 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 MF International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mF International has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and MF International go up and down completely randomly.
Pair Corralation between Sandstorm Gold and MF International
Given the investment horizon of 90 days Sandstorm Gold Ltd is expected to generate 0.3 times more return on investment than MF International. However, Sandstorm Gold Ltd is 3.32 times less risky than MF International. It trades about 0.03 of its potential returns per unit of risk. mF International Limited is currently generating about -0.04 per unit of risk. If you would invest 552.00 in Sandstorm Gold Ltd on September 3, 2024 and sell it today you would earn a total of 27.00 from holding Sandstorm Gold Ltd or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sandstorm Gold Ltd vs. mF International Limited
Performance |
| Timeline |
| Sandstorm Gold |
| mF International |
Sandstorm Gold and MF International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandstorm Gold and MF International
The main advantage of trading using opposite Sandstorm Gold and MF International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, MF International 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 MF International will offset losses from the drop in MF International'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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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