Correlation Between 26442CAA2 and Sandstorm Gold

Can any of the company-specific risk be diversified away by investing in both 26442CAA2 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 26442CAA2 and Sandstorm Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DUKE ENERGY CAROLINAS and Sandstorm Gold Ltd, you can compare the effects of market volatilities on 26442CAA2 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 26442CAA2 with a short position of Sandstorm Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of 26442CAA2 and Sandstorm Gold.

Diversification Opportunities for 26442CAA2 and Sandstorm Gold

0.43

Correlation Coefficient

26442CAA2  Sandstorm Gold

Very weak diversification

The 3 months correlation between 26442CAA2 and Sandstorm is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding DUKE ENERGY CAROLINAS and Sandstorm Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandstorm Gold and 26442CAA2 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 DUKE ENERGY CAROLINAS 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 26442CAA2 i.e., 26442CAA2 and Sandstorm Gold go up and down completely randomly.

Pair Corralation between 26442CAA2 and Sandstorm Gold

Assuming the 90 days trading horizon 26442CAA2 is expected to generate 4.05 times less return on investment than Sandstorm Gold. But when comparing it to its historical volatility, DUKE ENERGY CAROLINAS is 1.58 times less risky than Sandstorm Gold. It trades about 0.09 of its potential returns per unit of risk. Sandstorm Gold Ltd is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  547.00  in Sandstorm Gold Ltd on December 26, 2024 and sell it today you would earn a total of  188.00  from holding Sandstorm Gold Ltd or generate 34.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.72%
Values	Daily Returns

DUKE ENERGY CAROLINAS  vs.  Sandstorm Gold Ltd

DUKE ENERGY CAROLINAS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DUKE ENERGY CAROLINAS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, 26442CAA2 may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Sandstorm Gold

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sandstorm Gold Ltd are ranked lower than 17 (%) 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.

Pair Trading with 26442CAA2 and Sandstorm Gold

The main advantage of trading using opposite 26442CAA2 and Sandstorm Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 26442CAA2 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 DUKE ENERGY CAROLINAS 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.