Correlation Between Sandstorm Gold and Siriuspoint

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

Diversification Opportunities for Sandstorm Gold and Siriuspoint

-0.47

Correlation Coefficient

Sandstorm Gold  Siriuspoint

Very good diversification

The 3 months correlation between Sandstorm and Siriuspoint is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and Siriuspoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siriuspoint 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 Siriuspoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siriuspoint has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and Siriuspoint go up and down completely randomly.

Pair Corralation between Sandstorm Gold and Siriuspoint

Given the investment horizon of 90 days Sandstorm Gold Ltd is expected to under-perform the Siriuspoint. But the stock apears to be less risky and, when comparing its historical volatility, Sandstorm Gold Ltd is 1.28 times less risky than Siriuspoint. The stock trades about -0.03 of its potential returns per unit of risk. The Siriuspoint is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,352  in Siriuspoint on October 15, 2024 and sell it today you would earn a total of  90.00  from holding Siriuspoint or generate 6.66% return on investment over 90 days.

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

Sandstorm Gold Ltd  vs.  Siriuspoint

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 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.

Siriuspoint

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Siriuspoint are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Siriuspoint may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Sandstorm Gold and Siriuspoint

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

The idea behind Sandstorm Gold Ltd and Siriuspoint 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.