Correlation Between Sandstorm Gold and Elmos Semiconductor

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

Diversification Opportunities for Sandstorm Gold and Elmos Semiconductor

0.0

Correlation Coefficient

Sandstorm Gold  Elmos Semiconductor

Pay attention - limited upside

The 3 months correlation between Sandstorm and Elmos is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and Elmos Semiconductor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elmos Semiconductor 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 Elmos Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elmos Semiconductor has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and Elmos Semiconductor go up and down completely randomly.

Pair Corralation between Sandstorm Gold and Elmos Semiconductor

Given the investment horizon of 90 days Sandstorm Gold is expected to generate 16.58 times less return on investment than Elmos Semiconductor. But when comparing it to its historical volatility, Sandstorm Gold Ltd is 2.94 times less risky than Elmos Semiconductor. It trades about 0.01 of its potential returns per unit of risk. Elmos Semiconductor SE is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,624  in Elmos Semiconductor SE on October 3, 2024 and sell it today you would earn a total of  6,299  from holding Elmos Semiconductor SE or generate 240.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Sandstorm Gold Ltd  vs.  Elmos Semiconductor SE

Sandstorm Gold

Risk-Adjusted Performance

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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 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.

Elmos Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Sandstorm Gold and Elmos Semiconductor

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

The idea behind Sandstorm Gold Ltd and Elmos Semiconductor SE 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 Global Correlations module to find global opportunities by holding instruments from different markets.