Correlation Between Citizens Bancorp and Sandstorm Gold

Can any of the company-specific risk be diversified away by investing in both Citizens Bancorp 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 Citizens Bancorp and Sandstorm Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Citizens Bancorp Investment and Sandstorm Gold Ltd, you can compare the effects of market volatilities on Citizens Bancorp 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 Citizens Bancorp with a short position of Sandstorm Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens Bancorp and Sandstorm Gold.

Diversification Opportunities for Citizens Bancorp and Sandstorm Gold

0.07

Correlation Coefficient

Citizens Bancorp  Sandstorm Gold

Significant diversification

The 3 months correlation between Citizens and Sandstorm is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Citizens Bancorp Investment and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm Gold and Citizens Bancorp 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 Citizens Bancorp Investment 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 Citizens Bancorp i.e., Citizens Bancorp and Sandstorm Gold go up and down completely randomly.

Pair Corralation between Citizens Bancorp and Sandstorm Gold

Given the investment horizon of 90 days Citizens Bancorp Investment is expected to generate 0.79 times more return on investment than Sandstorm Gold. However, Citizens Bancorp Investment is 1.26 times less risky than Sandstorm Gold. It trades about 0.09 of its potential returns per unit of risk. Sandstorm Gold Ltd is currently generating about -0.04 per unit of risk. If you would invest  2,337  in Citizens Bancorp Investment on September 18, 2024 and sell it today you would earn a total of  218.00  from holding Citizens Bancorp Investment or generate 9.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Citizens Bancorp Investment  vs.  Sandstorm Gold Ltd

Citizens Bancorp Inv

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Bancorp Investment are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Citizens Bancorp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Sandstorm Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sandstorm Gold Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Sandstorm Gold is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Citizens Bancorp and Sandstorm Gold

The main advantage of trading using opposite Citizens Bancorp and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens Bancorp 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.

The idea behind Citizens Bancorp Investment and Sandstorm Gold Ltd 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.