Correlation Between Sandstorm Gold and BOEING

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Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and BOEING 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 BOEING 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 BOEING CO, you can compare the effects of market volatilities on Sandstorm Gold and BOEING 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 BOEING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and BOEING.

Diversification Opportunities for Sandstorm Gold and BOEING

0.11
  Correlation Coefficient

Average diversification

The 3 months correlation between Sandstorm and BOEING is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and BOEING CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOEING CO 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 BOEING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOEING CO has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and BOEING go up and down completely randomly.

Pair Corralation between Sandstorm Gold and BOEING

Given the investment horizon of 90 days Sandstorm Gold Ltd is expected to under-perform the BOEING. In addition to that, Sandstorm Gold is 8.16 times more volatile than BOEING CO. It trades about -0.06 of its total potential returns per unit of risk. BOEING CO is currently generating about -0.19 per unit of volatility. If you would invest  9,491  in BOEING CO on August 25, 2024 and sell it today you would lose (230.00) from holding BOEING CO or give up 2.42% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Sandstorm Gold Ltd  vs.  BOEING CO

 Performance 
       Timeline  
Sandstorm Gold 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Sandstorm Gold Ltd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Sandstorm Gold is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
BOEING CO 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BOEING CO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BOEING is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Sandstorm Gold and BOEING Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sandstorm Gold and BOEING

The main advantage of trading using opposite Sandstorm Gold and BOEING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, BOEING 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 BOEING will offset losses from the drop in BOEING's long position.
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The idea behind Sandstorm Gold Ltd and BOEING CO pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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