Correlation Between World Copper and Seabridge Gold
Can any of the company-specific risk be diversified away by investing in both World Copper 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 World Copper and Seabridge Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Copper and Seabridge Gold, you can compare the effects of market volatilities on World Copper 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 World Copper with a short position of Seabridge Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Copper and Seabridge Gold.
Diversification Opportunities for World Copper and Seabridge Gold
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between World and Seabridge is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding World Copper and Seabridge Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seabridge Gold and World Copper 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 World Copper 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 World Copper i.e., World Copper and Seabridge Gold go up and down completely randomly.
Pair Corralation between World Copper and Seabridge Gold
Assuming the 90 days horizon World Copper is expected to generate 2.23 times more return on investment than Seabridge Gold. However, World Copper is 2.23 times more volatile than Seabridge Gold. It trades about -0.16 of its potential returns per unit of risk. Seabridge Gold is currently generating about -0.37 per unit of risk. If you would invest 8.00 in World Copper on September 20, 2024 and sell it today you would lose (1.50) from holding World Copper or give up 18.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
World Copper vs. Seabridge Gold
Performance |
| Timeline |
| World Copper |
| Seabridge Gold |
World Copper and Seabridge Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with World Copper and Seabridge Gold
The main advantage of trading using opposite World Copper and Seabridge Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Copper 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.The idea behind World Copper and Seabridge Gold pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Seabridge Gold vs. Arizona Sonoran Copper | Seabridge Gold vs. World Copper | Seabridge Gold vs. QC Copper and |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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