Correlation Between Sandstorm Gold and Northstar Clean
Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and Northstar Clean 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 Northstar Clean 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 Northstar Clean Technologies, you can compare the effects of market volatilities on Sandstorm Gold and Northstar Clean 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 Northstar Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and Northstar Clean.
Diversification Opportunities for Sandstorm Gold and Northstar Clean
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sandstorm and Northstar is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and Northstar Clean Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northstar Clean Tech 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 Northstar Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northstar Clean Tech has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and Northstar Clean go up and down completely randomly.
Pair Corralation between Sandstorm Gold and Northstar Clean
Given the investment horizon of 90 days Sandstorm Gold Ltd is expected to under-perform the Northstar Clean. But the stock apears to be less risky and, when comparing its historical volatility, Sandstorm Gold Ltd is 1.27 times less risky than Northstar Clean. The stock trades about -0.07 of its potential returns per unit of risk. The Northstar Clean Technologies is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Northstar Clean Technologies on September 2, 2024 and sell it today you would earn a total of 1.00 from holding Northstar Clean Technologies or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sandstorm Gold Ltd vs. Northstar Clean Technologies
Performance |
| Timeline |
| Sandstorm Gold |
| Northstar Clean Tech |
Sandstorm Gold and Northstar Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandstorm Gold and Northstar Clean
The main advantage of trading using opposite Sandstorm Gold and Northstar Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, Northstar Clean 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 Northstar Clean will offset losses from the drop in Northstar Clean's long position.| Sandstorm Gold vs. Fortitude Gold Corp | Sandstorm Gold vs. New Gold | Sandstorm Gold vs. Galiano Gold | Sandstorm Gold vs. GoldMining |
| Northstar Clean vs. Susglobal Energy Corp | Northstar Clean vs. LanzaTech Global | Northstar Clean vs. Aqua Metals | Northstar Clean vs. LiCycle Holdings 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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