Correlation Between Sandstorm Gold and Treasury Metals

Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and Treasury Metals 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 Treasury Metals 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 Treasury Metals, you can compare the effects of market volatilities on Sandstorm Gold and Treasury Metals 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 Treasury Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and Treasury Metals.

Diversification Opportunities for Sandstorm Gold and Treasury Metals

0.14

Correlation Coefficient

Sandstorm Gold  Treasury Metals

Average diversification

The 3 months correlation between Sandstorm and Treasury is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and Treasury Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Treasury Metals 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 Treasury Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Treasury Metals has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and Treasury Metals go up and down completely randomly.

Pair Corralation between Sandstorm Gold and Treasury Metals

If you would invest  553.00  in Sandstorm Gold Ltd on September 4, 2024 and sell it today you would earn a total of  9.00  from holding Sandstorm Gold Ltd or generate 1.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Sandstorm Gold Ltd  vs.  Treasury Metals

Sandstorm Gold

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sandstorm Gold Ltd are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Sandstorm Gold is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Treasury Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Treasury Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Treasury Metals is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Sandstorm Gold and Treasury Metals

The main advantage of trading using opposite Sandstorm Gold and Treasury Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, Treasury Metals 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 Treasury Metals will offset losses from the drop in Treasury Metals' long position.

The idea behind Sandstorm Gold Ltd and Treasury Metals 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.