Correlation Between Summit Materials and Seabridge Gold
Can any of the company-specific risk be diversified away by investing in both Summit Materials and Seabridge 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 Summit Materials and Seabridge Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Materials and Seabridge Gold, you can compare the effects of market volatilities on Summit Materials and Seabridge 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 Summit Materials with a short position of Seabridge Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Materials and Seabridge Gold.
Diversification Opportunities for Summit Materials and Seabridge Gold
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Summit and Seabridge is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Summit Materials and Seabridge Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seabridge Gold and Summit Materials 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 Summit Materials are associated (or correlated) with Seabridge Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seabridge Gold has no effect on the direction of Summit Materials i.e., Summit Materials and Seabridge Gold go up and down completely randomly.
Pair Corralation between Summit Materials and Seabridge Gold
Assuming the 90 days trading horizon Summit Materials is expected to generate 0.87 times more return on investment than Seabridge Gold. However, Summit Materials is 1.16 times less risky than Seabridge Gold. It trades about 0.26 of its potential returns per unit of risk. Seabridge Gold is currently generating about -0.27 per unit of risk. If you would invest 4,220 in Summit Materials on August 28, 2024 and sell it today you would earn a total of 700.00 from holding Summit Materials or generate 16.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Materials vs. Seabridge Gold
Performance |
| Timeline |
| Summit Materials |
| Seabridge Gold |
Summit Materials and Seabridge Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Materials and Seabridge Gold
The main advantage of trading using opposite Summit Materials and Seabridge Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Materials position performs unexpectedly, Seabridge 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 Seabridge Gold will offset losses from the drop in Seabridge Gold's long position.| Summit Materials vs. Apple Inc | Summit Materials vs. Apple Inc | Summit Materials vs. Apple Inc | Summit Materials vs. Apple Inc |
| Seabridge Gold vs. GOODYEAR T RUBBER | Seabridge Gold vs. Vulcan Materials | Seabridge Gold vs. Summit Materials | Seabridge Gold vs. Materialise NV |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |