Correlation Between Wheaton Precious and Seabridge Gold
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious 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 Wheaton Precious and Seabridge Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wheaton Precious Metals and Seabridge Gold, you can compare the effects of market volatilities on Wheaton Precious 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 Wheaton Precious with a short position of Seabridge Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Seabridge Gold.
Diversification Opportunities for Wheaton Precious and Seabridge Gold
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wheaton and Seabridge is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Seabridge Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seabridge Gold and Wheaton Precious 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 Wheaton Precious Metals 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 Wheaton Precious i.e., Wheaton Precious and Seabridge Gold go up and down completely randomly.
Pair Corralation between Wheaton Precious and Seabridge Gold
Assuming the 90 days trading horizon Wheaton Precious Metals is expected to generate 0.8 times more return on investment than Seabridge Gold. However, Wheaton Precious Metals is 1.24 times less risky than Seabridge Gold. It trades about 0.06 of its potential returns per unit of risk. Seabridge Gold is currently generating about 0.04 per unit of risk. If you would invest 8,212 in Wheaton Precious Metals on October 21, 2024 and sell it today you would earn a total of 141.00 from holding Wheaton Precious Metals or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wheaton Precious Metals vs. Seabridge Gold
Performance |
| Timeline |
| Wheaton Precious Metals |
| Seabridge Gold |
Wheaton Precious and Seabridge Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Seabridge Gold
The main advantage of trading using opposite Wheaton Precious and Seabridge Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious 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.| Wheaton Precious vs. Franco Nevada | Wheaton Precious vs. Pan American Silver | Wheaton Precious vs. Agnico Eagle Mines | Wheaton Precious vs. Sandstorm Gold Ltd |
| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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