Correlation Between Skechers USA and Sandstorm Gold
Can any of the company-specific risk be diversified away by investing in both Skechers USA and Sandstorm 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 Skechers USA and Sandstorm Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skechers USA and Sandstorm Gold Ltd, you can compare the effects of market volatilities on Skechers USA and Sandstorm 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 Skechers USA with a short position of Sandstorm Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skechers USA and Sandstorm Gold.
Diversification Opportunities for Skechers USA and Sandstorm Gold
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Skechers and Sandstorm is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Skechers USA and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm Gold and Skechers USA 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 Skechers USA are associated (or correlated) with Sandstorm Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandstorm Gold has no effect on the direction of Skechers USA i.e., Skechers USA and Sandstorm Gold go up and down completely randomly.
Pair Corralation between Skechers USA and Sandstorm Gold
Considering the 90-day investment horizon Skechers USA is expected to under-perform the Sandstorm Gold. In addition to that, Skechers USA is 2.0 times more volatile than Sandstorm Gold Ltd. It trades about -0.1 of its total potential returns per unit of risk. Sandstorm Gold Ltd is currently generating about 0.31 per unit of volatility. If you would invest 570.00 in Sandstorm Gold Ltd on November 18, 2024 and sell it today you would earn a total of 67.00 from holding Sandstorm Gold Ltd or generate 11.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skechers USA vs. Sandstorm Gold Ltd
Performance |
| Timeline |
| Skechers USA |
| Sandstorm Gold |
Skechers USA and Sandstorm Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skechers USA and Sandstorm Gold
The main advantage of trading using opposite Skechers USA and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skechers USA position performs unexpectedly, Sandstorm 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 Sandstorm Gold will offset losses from the drop in Sandstorm Gold's long position.| Skechers USA vs. Crocs Inc | Skechers USA vs. On Holding | Skechers USA vs. Nike Inc | Skechers USA vs. Designer Brands |
| Sandstorm Gold vs. Franco Nevada | Sandstorm Gold vs. Royal Gold | Sandstorm Gold vs. Alamos Gold | Sandstorm Gold vs. Seabridge Gold |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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