Correlation Between Seabridge Gold and Natural Resource
Can any of the company-specific risk be diversified away by investing in both Seabridge Gold and Natural Resource 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 Natural Resource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seabridge Gold and Natural Resource Partners, you can compare the effects of market volatilities on Seabridge Gold and Natural Resource 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 Natural Resource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seabridge Gold and Natural Resource.
Diversification Opportunities for Seabridge Gold and Natural Resource
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Seabridge and Natural is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Seabridge Gold and Natural Resource Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Resource Partners 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 Natural Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Resource Partners has no effect on the direction of Seabridge Gold i.e., Seabridge Gold and Natural Resource go up and down completely randomly.
Pair Corralation between Seabridge Gold and Natural Resource
Allowing for the 90-day total investment horizon Seabridge Gold is expected to under-perform the Natural Resource. In addition to that, Seabridge Gold is 3.8 times more volatile than Natural Resource Partners. It trades about -0.04 of its total potential returns per unit of risk. Natural Resource Partners is currently generating about -0.12 per unit of volatility. If you would invest 10,612 in Natural Resource Partners on November 29, 2024 and sell it today you would lose (323.00) from holding Natural Resource Partners or give up 3.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seabridge Gold vs. Natural Resource Partners
Performance |
| Timeline |
| Seabridge Gold |
| Natural Resource Partners |
Seabridge Gold and Natural Resource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seabridge Gold and Natural Resource
The main advantage of trading using opposite Seabridge Gold and Natural Resource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seabridge Gold position performs unexpectedly, Natural Resource 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 Natural Resource will offset losses from the drop in Natural Resource's long position.| Seabridge Gold vs. Franco Nevada | Seabridge Gold vs. Wheaton Precious Metals | Seabridge Gold vs. Osisko Gold Ro | Seabridge Gold vs. Sandstorm Gold Ltd |
| Natural Resource vs. Hallador Energy | Natural Resource vs. Adaro Energy Tbk | Natural Resource vs. Alliance Resource Partners | Natural Resource vs. Peabody Energy 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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