Correlation Between Sandstorm Gold and First Majestic
Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and First Majestic 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 First Majestic 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 First Majestic Silver, you can compare the effects of market volatilities on Sandstorm Gold and First Majestic 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 First Majestic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and First Majestic.
Diversification Opportunities for Sandstorm Gold and First Majestic
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sandstorm and First is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and First Majestic Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Majestic Silver 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 First Majestic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Majestic Silver has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and First Majestic go up and down completely randomly.
Pair Corralation between Sandstorm Gold and First Majestic
Assuming the 90 days trading horizon Sandstorm Gold Ltd is expected to generate 0.62 times more return on investment than First Majestic. However, Sandstorm Gold Ltd is 1.62 times less risky than First Majestic. It trades about 0.05 of its potential returns per unit of risk. First Majestic Silver is currently generating about 0.01 per unit of risk. If you would invest 567.00 in Sandstorm Gold Ltd on November 19, 2024 and sell it today you would earn a total of 337.00 from holding Sandstorm Gold Ltd or generate 59.44% 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. First Majestic Silver
Performance |
| Timeline |
| Sandstorm Gold |
| First Majestic Silver |
Sandstorm Gold and First Majestic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandstorm Gold and First Majestic
The main advantage of trading using opposite Sandstorm Gold and First Majestic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, First Majestic 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 First Majestic will offset losses from the drop in First Majestic's long position.| Sandstorm Gold vs. Osisko Gold Ro | Sandstorm Gold vs. Wheaton Precious Metals | Sandstorm Gold vs. Seabridge Gold | Sandstorm Gold vs. MAG Silver Corp |
| First Majestic vs. Canadian General Investments | First Majestic vs. Economic Investment Trust | First Majestic vs. Farstarcap Investment Corp | First Majestic vs. Highwood Asset Management |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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