Correlation Between MAG Silver and Seabridge Gold
Can any of the company-specific risk be diversified away by investing in both MAG Silver 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 MAG Silver and Seabridge Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAG Silver Corp and Seabridge Gold, you can compare the effects of market volatilities on MAG Silver 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 MAG Silver with a short position of Seabridge Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG Silver and Seabridge Gold.
Diversification Opportunities for MAG Silver and Seabridge Gold
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MAG and Seabridge is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding MAG Silver Corp and Seabridge Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seabridge Gold and MAG Silver 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 MAG Silver Corp 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 MAG Silver i.e., MAG Silver and Seabridge Gold go up and down completely randomly.
Pair Corralation between MAG Silver and Seabridge Gold
Assuming the 90 days trading horizon MAG Silver Corp is expected to generate 0.92 times more return on investment than Seabridge Gold. However, MAG Silver Corp is 1.09 times less risky than Seabridge Gold. It trades about 0.04 of its potential returns per unit of risk. Seabridge Gold is currently generating about 0.03 per unit of risk. If you would invest 1,724 in MAG Silver Corp on November 2, 2024 and sell it today you would earn a total of 631.00 from holding MAG Silver Corp or generate 36.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAG Silver Corp vs. Seabridge Gold
Performance |
| Timeline |
| MAG Silver Corp |
| Seabridge Gold |
MAG Silver and Seabridge Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG Silver and Seabridge Gold
The main advantage of trading using opposite MAG Silver and Seabridge Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG Silver 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.| MAG Silver vs. Pan American Silver | MAG Silver vs. Endeavour Silver Corp | MAG Silver vs. SSR Mining | MAG Silver vs. Osisko Gold Ro |
| Seabridge Gold vs. NovaGold Resources | Seabridge Gold vs. Sandstorm Gold Ltd | Seabridge Gold vs. MAG Silver Corp | Seabridge Gold vs. Osisko Gold Ro |
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.
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