Correlation Between Sandstorm Gold and Orezone Gold
Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and Orezone 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 Orezone 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 Orezone Gold Corp, you can compare the effects of market volatilities on Sandstorm Gold and Orezone 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 Orezone Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and Orezone Gold.
Diversification Opportunities for Sandstorm Gold and Orezone Gold
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sandstorm and Orezone is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and Orezone Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orezone 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 Orezone Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orezone Gold Corp has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and Orezone Gold go up and down completely randomly.
Pair Corralation between Sandstorm Gold and Orezone Gold
Given the investment horizon of 90 days Sandstorm Gold Ltd is expected to generate 0.62 times more return on investment than Orezone Gold. However, Sandstorm Gold Ltd is 1.6 times less risky than Orezone Gold. It trades about 0.04 of its potential returns per unit of risk. Orezone Gold Corp is currently generating about -0.01 per unit of risk. If you would invest 481.00 in Sandstorm Gold Ltd on November 19, 2024 and sell it today you would earn a total of 156.00 from holding Sandstorm Gold Ltd or generate 32.43% 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. Orezone Gold Corp
Performance |
| Timeline |
| Sandstorm Gold |
| Orezone Gold Corp |
Sandstorm Gold and Orezone Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandstorm Gold and Orezone Gold
The main advantage of trading using opposite Sandstorm Gold and Orezone Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, Orezone 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 Orezone Gold will offset losses from the drop in Orezone Gold's long position.| Sandstorm Gold vs. Franco Nevada | Sandstorm Gold vs. Royal Gold | Sandstorm Gold vs. Alamos Gold | Sandstorm Gold vs. Seabridge Gold |
| Orezone Gold vs. Aurion Resources | Orezone Gold vs. Minera Alamos | Orezone Gold vs. Rio2 Limited | Orezone Gold vs. Roscan Gold Corp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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