Correlation Between Sandstorm Gold and Metalla Royalty
Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and Metalla Royalty 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 Metalla Royalty 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 Metalla Royalty Streaming, you can compare the effects of market volatilities on Sandstorm Gold and Metalla Royalty 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 Metalla Royalty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and Metalla Royalty.
Diversification Opportunities for Sandstorm Gold and Metalla Royalty
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sandstorm and Metalla is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and Metalla Royalty Streaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalla Royalty Streaming 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 Metalla Royalty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metalla Royalty Streaming has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and Metalla Royalty go up and down completely randomly.
Pair Corralation between Sandstorm Gold and Metalla Royalty
Given the investment horizon of 90 days Sandstorm Gold Ltd is expected to generate 0.64 times more return on investment than Metalla Royalty. However, Sandstorm Gold Ltd is 1.56 times less risky than Metalla Royalty. It trades about 0.03 of its potential returns per unit of risk. Metalla Royalty Streaming is currently generating about 0.02 per unit of risk. If you would invest 544.00 in Sandstorm Gold Ltd on September 2, 2024 and sell it today you would earn a total of 35.00 from holding Sandstorm Gold Ltd or generate 6.43% 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. Metalla Royalty Streaming
Performance |
| Timeline |
| Sandstorm Gold |
| Metalla Royalty Streaming |
Sandstorm Gold and Metalla Royalty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandstorm Gold and Metalla Royalty
The main advantage of trading using opposite Sandstorm Gold and Metalla Royalty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, Metalla Royalty 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 Metalla Royalty will offset losses from the drop in Metalla Royalty's long position.| Sandstorm Gold vs. Fortitude Gold Corp | Sandstorm Gold vs. New Gold | Sandstorm Gold vs. Galiano Gold | Sandstorm Gold vs. GoldMining |
| Metalla Royalty vs. Hecla Mining | Metalla Royalty vs. McEwen Mining | Metalla Royalty vs. Endeavour Silver Corp | Metalla Royalty vs. New Pacific Metals |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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