Correlation Between NuRAN Wireless and Sandstorm Gold

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

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

Diversification Opportunities for NuRAN Wireless and Sandstorm Gold

0.04

Correlation Coefficient

NuRAN Wireless  Sandstorm Gold

Significant diversification

The 3 months correlation between NuRAN and Sandstorm is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding NuRAN Wireless and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm Gold and NuRAN Wireless 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 NuRAN Wireless 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 NuRAN Wireless i.e., NuRAN Wireless and Sandstorm Gold go up and down completely randomly.

Pair Corralation between NuRAN Wireless and Sandstorm Gold

Assuming the 90 days horizon NuRAN Wireless is expected to under-perform the Sandstorm Gold. In addition to that, NuRAN Wireless is 1.71 times more volatile than Sandstorm Gold Ltd. It trades about -0.18 of its total potential returns per unit of risk. Sandstorm Gold Ltd is currently generating about 0.21 per unit of volatility. If you would invest  540.00  in Sandstorm Gold Ltd on September 13, 2024 and sell it today you would earn a total of  46.00  from holding Sandstorm Gold Ltd or generate 8.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

NuRAN Wireless  vs.  Sandstorm Gold Ltd

NuRAN Wireless

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NuRAN Wireless has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 NuRAN Wireless and Sandstorm Gold

The main advantage of trading using opposite NuRAN Wireless and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NuRAN Wireless 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 NuRAN Wireless 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.