Correlation Between Sandstorm Gold and ZOOZ Power

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

Diversification Opportunities for Sandstorm Gold and ZOOZ Power

-0.69

Correlation Coefficient

Sandstorm Gold  ZOOZ Power

Excellent diversification

The 3 months correlation between Sandstorm and ZOOZ is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and ZOOZ Power Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZOOZ Power 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 ZOOZ Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZOOZ Power has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and ZOOZ Power go up and down completely randomly.

Pair Corralation between Sandstorm Gold and ZOOZ Power

Given the investment horizon of 90 days Sandstorm Gold Ltd is expected to under-perform the ZOOZ Power. But the stock apears to be less risky and, when comparing its historical volatility, Sandstorm Gold Ltd is 1.48 times less risky than ZOOZ Power. The stock trades about -0.17 of its potential returns per unit of risk. The ZOOZ Power Ltd is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  277.00  in ZOOZ Power Ltd on September 22, 2024 and sell it today you would earn a total of  5.00  from holding ZOOZ Power Ltd or generate 1.81% return on investment over 90 days.

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

Sandstorm Gold Ltd  vs.  ZOOZ Power Ltd

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 latest unfluctuating performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

ZOOZ Power

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ZOOZ Power Ltd are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, ZOOZ Power showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sandstorm Gold and ZOOZ Power

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

The idea behind Sandstorm Gold Ltd and ZOOZ Power 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.