Correlation Between Air Lease and Sandstorm Gold
Can any of the company-specific risk be diversified away by investing in both Air Lease 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 Air Lease and Sandstorm Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Lease and Sandstorm Gold Ltd, you can compare the effects of market volatilities on Air Lease 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 Air Lease with a short position of Sandstorm Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Lease and Sandstorm Gold.
Diversification Opportunities for Air Lease and Sandstorm Gold
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Air and Sandstorm is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Air Lease and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm Gold and Air Lease 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 Air Lease 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 Air Lease i.e., Air Lease and Sandstorm Gold go up and down completely randomly.
Pair Corralation between Air Lease and Sandstorm Gold
Allowing for the 90-day total investment horizon Air Lease is expected to generate 15.16 times less return on investment than Sandstorm Gold. But when comparing it to its historical volatility, Air Lease is 1.08 times less risky than Sandstorm Gold. It trades about 0.02 of its potential returns per unit of risk. Sandstorm Gold Ltd is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 546.00 in Sandstorm Gold Ltd on December 27, 2024 and sell it today you would earn a total of 189.00 from holding Sandstorm Gold Ltd or generate 34.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Air Lease vs. Sandstorm Gold Ltd
Performance |
Timeline |
Air Lease |
Sandstorm Gold |
Air Lease and Sandstorm Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Air Lease and Sandstorm Gold
The main advantage of trading using opposite Air Lease and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Lease 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.Air Lease vs. Alta Equipment Group | Air Lease vs. McGrath RentCorp | Air Lease vs. Herc Holdings | Air Lease vs. HE Equipment Services |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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