Correlation Between Seabridge Gold and Kaiser Aluminum
Can any of the company-specific risk be diversified away by investing in both Seabridge Gold and Kaiser Aluminum 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 Seabridge Gold and Kaiser Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seabridge Gold and Kaiser Aluminum, you can compare the effects of market volatilities on Seabridge Gold and Kaiser Aluminum 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 Seabridge Gold with a short position of Kaiser Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seabridge Gold and Kaiser Aluminum.
Diversification Opportunities for Seabridge Gold and Kaiser Aluminum
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seabridge and Kaiser is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Seabridge Gold and Kaiser Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum and Seabridge 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 Seabridge Gold are associated (or correlated) with Kaiser Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaiser Aluminum has no effect on the direction of Seabridge Gold i.e., Seabridge Gold and Kaiser Aluminum go up and down completely randomly.
Pair Corralation between Seabridge Gold and Kaiser Aluminum
Allowing for the 90-day total investment horizon Seabridge Gold is expected to under-perform the Kaiser Aluminum. But the stock apears to be less risky and, when comparing its historical volatility, Seabridge Gold is 1.18 times less risky than Kaiser Aluminum. The stock trades about -0.41 of its potential returns per unit of risk. The Kaiser Aluminum is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 7,071 in Kaiser Aluminum on August 23, 2024 and sell it today you would earn a total of 1,047 from holding Kaiser Aluminum or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seabridge Gold vs. Kaiser Aluminum
Performance |
| Timeline |
| Seabridge Gold |
| Kaiser Aluminum |
Seabridge Gold and Kaiser Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seabridge Gold and Kaiser Aluminum
The main advantage of trading using opposite Seabridge Gold and Kaiser Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seabridge Gold position performs unexpectedly, Kaiser Aluminum 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 Kaiser Aluminum will offset losses from the drop in Kaiser Aluminum's long position.| Seabridge Gold vs. Agnico Eagle Mines | Seabridge Gold vs. Pan American Silver | Seabridge Gold vs. Kinross Gold | Seabridge Gold vs. B2Gold Corp |
| Kaiser Aluminum vs. Century Aluminum | Kaiser Aluminum vs. China Hongqiao Group | Kaiser Aluminum vs. Constellium Nv | Kaiser Aluminum vs. Alcoa Corp |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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