Correlation Between 08576PAF8 and Sandstorm Gold

Can any of the company-specific risk be diversified away by investing in both 08576PAF8 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 08576PAF8 and Sandstorm Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BERY 165 15 JAN 27 and Sandstorm Gold Ltd, you can compare the effects of market volatilities on 08576PAF8 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 08576PAF8 with a short position of Sandstorm Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of 08576PAF8 and Sandstorm Gold.

Diversification Opportunities for 08576PAF8 and Sandstorm Gold

0.05

Correlation Coefficient

08576PAF8  Sandstorm Gold

Significant diversification

The 3 months correlation between 08576PAF8 and Sandstorm is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding BERY 165 15 JAN 27 and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm Gold and 08576PAF8 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 BERY 165 15 JAN 27 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 08576PAF8 i.e., 08576PAF8 and Sandstorm Gold go up and down completely randomly.

Pair Corralation between 08576PAF8 and Sandstorm Gold

Assuming the 90 days trading horizon BERY 165 15 JAN 27 is expected to under-perform the Sandstorm Gold. But the bond apears to be less risky and, when comparing its historical volatility, BERY 165 15 JAN 27 is 1.86 times less risky than Sandstorm Gold. The bond trades about -0.12 of its potential returns per unit of risk. The Sandstorm Gold Ltd is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  561.00  in Sandstorm Gold Ltd on December 2, 2024 and sell it today you would earn a total of  52.00  from holding Sandstorm Gold Ltd or generate 9.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.44%
Values	Daily Returns

BERY 165 15 JAN 27  vs.  Sandstorm Gold Ltd

BERY 165 15

Risk-Adjusted Performance

Very Weak

Over the last 90 days BERY 165 15 JAN 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for BERY 165 15 JAN 27 investors.

Sandstorm Gold

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sandstorm Gold Ltd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, Sandstorm Gold may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with 08576PAF8 and Sandstorm Gold

The main advantage of trading using opposite 08576PAF8 and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 08576PAF8 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 BERY 165 15 JAN 27 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.