Correlation Between Sandstorm Gold and Sprott Physical
Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and Sprott Physical 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 Sprott Physical 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 Sprott Physical Platinum, you can compare the effects of market volatilities on Sandstorm Gold and Sprott Physical 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 Sprott Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and Sprott Physical.
Diversification Opportunities for Sandstorm Gold and Sprott Physical
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sandstorm and Sprott is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and Sprott Physical Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Physical Platinum 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 Sprott Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Physical Platinum has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and Sprott Physical go up and down completely randomly.
Pair Corralation between Sandstorm Gold and Sprott Physical
Assuming the 90 days trading horizon Sandstorm Gold Ltd is expected to generate 0.52 times more return on investment than Sprott Physical. However, Sandstorm Gold Ltd is 1.94 times less risky than Sprott Physical. It trades about 0.04 of its potential returns per unit of risk. Sprott Physical Platinum is currently generating about 0.02 per unit of risk. If you would invest 767.00 in Sandstorm Gold Ltd on August 29, 2024 and sell it today you would earn a total of 53.00 from holding Sandstorm Gold Ltd or generate 6.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sandstorm Gold Ltd vs. Sprott Physical Platinum
Performance |
| Timeline |
| Sandstorm Gold |
| Sprott Physical Platinum |
Sandstorm Gold and Sprott Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandstorm Gold and Sprott Physical
The main advantage of trading using opposite Sandstorm Gold and Sprott Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, Sprott Physical 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 Sprott Physical will offset losses from the drop in Sprott Physical'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 |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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