Correlation Between Sandstorm Gold and Link Motion

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

Diversification Opportunities for Sandstorm Gold and Link Motion

0.0

Correlation Coefficient

Sandstorm Gold  Link Motion

Pay attention - limited upside

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

Pair Corralation between Sandstorm Gold and Link Motion

If you would invest  536.00  in Sandstorm Gold Ltd on February 4, 2024 and sell it today you would earn a total of  7.00  from holding Sandstorm Gold Ltd or generate 1.31% 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.  Link Motion

Sandstorm Gold

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sandstorm Gold Ltd are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Sandstorm Gold exhibited solid returns over the last few months and may actually be approaching a breakup point.

Link Motion

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Link Motion has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Link Motion is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Sandstorm Gold and Link Motion

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

The idea behind Sandstorm Gold Ltd and Link Motion 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.