Correlation Between United Guardian and Sandstorm Gold
Can any of the company-specific risk be diversified away by investing in both United Guardian 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 United Guardian and Sandstorm Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Guardian and Sandstorm Gold Ltd, you can compare the effects of market volatilities on United Guardian 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 United Guardian with a short position of Sandstorm Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Guardian and Sandstorm Gold.
Diversification Opportunities for United Guardian and Sandstorm Gold
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and Sandstorm is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding United Guardian and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm Gold and United Guardian 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 United Guardian 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 United Guardian i.e., United Guardian and Sandstorm Gold go up and down completely randomly.
Pair Corralation between United Guardian and Sandstorm Gold
Allowing for the 90-day total investment horizon United Guardian is expected to generate 1.42 times less return on investment than Sandstorm Gold. In addition to that, United Guardian is 1.36 times more volatile than Sandstorm Gold Ltd. It trades about 0.01 of its total potential returns per unit of risk. Sandstorm Gold Ltd is currently generating about 0.02 per unit of volatility. If you would invest 532.00 in Sandstorm Gold Ltd on August 23, 2024 and sell it today you would earn a total of 48.00 from holding Sandstorm Gold Ltd or generate 9.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Guardian vs. Sandstorm Gold Ltd
Performance |
| Timeline |
| United Guardian |
| Sandstorm Gold |
United Guardian and Sandstorm Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Guardian and Sandstorm Gold
The main advantage of trading using opposite United Guardian and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Guardian 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.| United Guardian vs. Honest Company | United Guardian vs. Hims Hers Health | United Guardian vs. Kimberly Clark | United Guardian vs. Colgate Palmolive |
| Sandstorm Gold vs. Agnico Eagle Mines | Sandstorm Gold vs. Pan American Silver | Sandstorm Gold vs. Kinross Gold | Sandstorm Gold vs. B2Gold Corp |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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