Correlation Between Sandstorm Gold and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Sandstorm Gold and Harmony 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 Sandstorm Gold and Harmony Gold 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 Harmony Gold Mining, you can compare the effects of market volatilities on Sandstorm Gold and Harmony 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 Sandstorm Gold with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandstorm Gold and Harmony Gold.
Diversification Opportunities for Sandstorm Gold and Harmony Gold
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sandstorm and Harmony is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sandstorm Gold Ltd and Harmony Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmony Gold Mining 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 Harmony Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmony Gold Mining has no effect on the direction of Sandstorm Gold i.e., Sandstorm Gold and Harmony Gold go up and down completely randomly.
Pair Corralation between Sandstorm Gold and Harmony Gold
Given the investment horizon of 90 days Sandstorm Gold Ltd is expected to generate 0.58 times more return on investment than Harmony Gold. However, Sandstorm Gold Ltd is 1.73 times less risky than Harmony Gold. It trades about 0.14 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.02 per unit of risk. If you would invest 756.00 in Sandstorm Gold Ltd on March 28, 2025 and sell it today you would earn a total of 166.00 from holding Sandstorm Gold Ltd or generate 21.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sandstorm Gold Ltd vs. Harmony Gold Mining
Performance |
| Timeline |
| Sandstorm Gold |
| Harmony Gold Mining |
Sandstorm Gold and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandstorm Gold and Harmony Gold
The main advantage of trading using opposite Sandstorm Gold and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandstorm Gold position performs unexpectedly, Harmony 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 Harmony Gold will offset losses from the drop in Harmony Gold's long position.| Sandstorm Gold vs. Franco Nevada | Sandstorm Gold vs. Royal Gold | Sandstorm Gold vs. Alamos Gold | Sandstorm Gold vs. Seabridge Gold |
| Harmony Gold vs. AngloGold Ashanti plc | Harmony Gold vs. Eldorado Gold Corp | Harmony Gold vs. Kinross Gold | Harmony Gold vs. Pan American Silver |
Check out your portfolio center.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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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