Correlation Between DRDGOLD Limited and Seabridge Gold
Can any of the company-specific risk be diversified away by investing in both DRDGOLD Limited 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 DRDGOLD Limited and Seabridge Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DRDGOLD Limited ADR and Seabridge Gold, you can compare the effects of market volatilities on DRDGOLD Limited 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 DRDGOLD Limited with a short position of Seabridge Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of DRDGOLD Limited and Seabridge Gold.
Diversification Opportunities for DRDGOLD Limited and Seabridge Gold
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between DRDGOLD and Seabridge is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding DRDGOLD Limited ADR and Seabridge Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seabridge Gold and DRDGOLD Limited 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 DRDGOLD Limited ADR 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 DRDGOLD Limited i.e., DRDGOLD Limited and Seabridge Gold go up and down completely randomly.
Pair Corralation between DRDGOLD Limited and Seabridge Gold
Considering the 90-day investment horizon DRDGOLD Limited ADR is expected to generate 1.31 times more return on investment than Seabridge Gold. However, DRDGOLD Limited is 1.31 times more volatile than Seabridge Gold. It trades about 0.13 of its potential returns per unit of risk. Seabridge Gold is currently generating about 0.08 per unit of risk. If you would invest 874.00 in DRDGOLD Limited ADR on October 20, 2024 and sell it today you would earn a total of 56.00 from holding DRDGOLD Limited ADR or generate 6.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
DRDGOLD Limited ADR vs. Seabridge Gold
Performance |
| Timeline |
| DRDGOLD Limited ADR |
| Seabridge Gold |
DRDGOLD Limited and Seabridge Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DRDGOLD Limited and Seabridge Gold
The main advantage of trading using opposite DRDGOLD Limited and Seabridge Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DRDGOLD Limited 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.| DRDGOLD Limited vs. Osisko Gold Ro | DRDGOLD Limited vs. Eldorado Gold Corp | DRDGOLD Limited vs. SSR Mining | DRDGOLD Limited vs. Idaho Strategic Resources |
| Seabridge Gold vs. Franco Nevada | Seabridge Gold vs. Wheaton Precious Metals | Seabridge Gold vs. Osisko Gold Ro | Seabridge Gold vs. Sandstorm Gold Ltd |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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