Correlation Between Sandstorm Gold and Learning Tree

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

Diversification Opportunities for Sandstorm Gold and Learning Tree

0.0

Correlation Coefficient

Sandstorm Gold  Learning Tree

Pay attention - limited upside

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

Pair Corralation between Sandstorm Gold and Learning Tree

If you would invest  538.00  in Sandstorm Gold Ltd on December 23, 2024 and sell it today you would earn a total of  141.00  from holding Sandstorm Gold Ltd or generate 26.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sandstorm Gold Ltd  vs.  Learning Tree International

Sandstorm Gold

Risk-Adjusted Performance

Good

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

Learning Tree Intern

Risk-Adjusted Performance

Very Weak

Over the last 90 days Learning Tree International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Learning Tree is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Sandstorm Gold and Learning Tree

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

The idea behind Sandstorm Gold Ltd and Learning Tree International 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.