Correlation Between I 80 and Sandstorm Gold

Can any of the company-specific risk be diversified away by investing in both I 80 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 I 80 and Sandstorm Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between I 80 Gold Corp and Sandstorm Gold Ltd, you can compare the effects of market volatilities on I 80 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 I 80 with a short position of Sandstorm Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of I 80 and Sandstorm Gold.

Diversification Opportunities for I 80 and Sandstorm Gold

0.76

Correlation Coefficient

I 80  Sandstorm Gold

Poor diversification

The 3 months correlation between IAUX and Sandstorm is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding I 80 Gold Corp and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm Gold and I 80 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 I 80 Gold Corp 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 I 80 i.e., I 80 and Sandstorm Gold go up and down completely randomly.

Pair Corralation between I 80 and Sandstorm Gold

Given the investment horizon of 90 days I 80 Gold Corp is expected to under-perform the Sandstorm Gold. In addition to that, I 80 is 2.4 times more volatile than Sandstorm Gold Ltd. It trades about -0.23 of its total potential returns per unit of risk. Sandstorm Gold Ltd is currently generating about -0.17 per unit of volatility. If you would invest  580.00  in Sandstorm Gold Ltd on September 22, 2024 and sell it today you would lose (41.00) from holding Sandstorm Gold Ltd or give up 7.07% of portfolio value over 90 days.

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

I 80 Gold Corp  vs.  Sandstorm Gold Ltd

I 80 Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days I 80 Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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.

Pair Trading with I 80 and Sandstorm Gold

The main advantage of trading using opposite I 80 and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I 80 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 I 80 Gold Corp 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.