Correlation Between Sandstorm Gold and 1730T32G7

Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and 1730T32G7 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 1730T32G7 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 US1730T32G73, you can compare the effects of market volatilities on Sandstorm Gold and 1730T32G7 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 1730T32G7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and 1730T32G7.

Diversification Opportunities for Sandstorm Gold and 1730T32G7

-0.36

Correlation Coefficient

Sandstorm Gold  1730T32G7

Very good diversification

The 3 months correlation between Sandstorm and 1730T32G7 is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and US1730T32G73 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US1730T32G73 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 1730T32G7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US1730T32G73 has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and 1730T32G7 go up and down completely randomly.

Pair Corralation between Sandstorm Gold and 1730T32G7

Given the investment horizon of 90 days Sandstorm Gold Ltd is expected to under-perform the 1730T32G7. But the stock apears to be less risky and, when comparing its historical volatility, Sandstorm Gold Ltd is 1.13 times less risky than 1730T32G7. The stock trades about -0.09 of its potential returns per unit of risk. The US1730T32G73 is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  8,116  in US1730T32G73 on September 26, 2024 and sell it today you would earn a total of  167.00  from holding US1730T32G73 or generate 2.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	17.07%
Values	Daily Returns

Sandstorm Gold Ltd  vs.  US1730T32G73

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 abnormal performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

US1730T32G73

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days US1730T32G73 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Bond's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for US1730T32G73 private investors.

Pair Trading with Sandstorm Gold and 1730T32G7

The main advantage of trading using opposite Sandstorm Gold and 1730T32G7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, 1730T32G7 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 1730T32G7 will offset losses from the drop in 1730T32G7's long position.

The idea behind Sandstorm Gold Ltd and US1730T32G73 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.

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 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.