Correlation Between Sandstorm Gold and Software Acquisition
Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and Software Acquisition 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 Software Acquisition 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 Software Acquisition Group, you can compare the effects of market volatilities on Sandstorm Gold and Software Acquisition 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 Software Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and Software Acquisition.
Diversification Opportunities for Sandstorm Gold and Software Acquisition
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sandstorm and Software is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and Software Acquisition Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Software Acquisition 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 Software Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Software Acquisition has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and Software Acquisition go up and down completely randomly.
Pair Corralation between Sandstorm Gold and Software Acquisition
Given the investment horizon of 90 days Sandstorm Gold Ltd is expected to under-perform the Software Acquisition. In addition to that, Sandstorm Gold is 1.26 times more volatile than Software Acquisition Group. It trades about -0.1 of its total potential returns per unit of risk. Software Acquisition Group is currently generating about 0.11 per unit of volatility. If you would invest 109.00 in Software Acquisition Group on September 3, 2024 and sell it today you would earn a total of 5.00 from holding Software Acquisition Group or generate 4.59% 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. Software Acquisition Group
Performance |
| Timeline |
| Sandstorm Gold |
| Software Acquisition |
Sandstorm Gold and Software Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandstorm Gold and Software Acquisition
The main advantage of trading using opposite Sandstorm Gold and Software Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, Software Acquisition 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 Software Acquisition will offset losses from the drop in Software Acquisition's long position.| Sandstorm Gold vs. Franco Nevada | Sandstorm Gold vs. Royal Gold | Sandstorm Gold vs. Alamos Gold | Sandstorm Gold vs. Seabridge Gold |
| Software Acquisition vs. Oatly Group AB | Software Acquisition vs. Westrock Coffee | Software Acquisition vs. Volaris | Software Acquisition vs. Seadrill Limited |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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