Correlation Between Wesdome Gold and Seabridge Gold
Can any of the company-specific risk be diversified away by investing in both Wesdome Gold 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 Wesdome Gold and Seabridge Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wesdome Gold Mines and Seabridge Gold, you can compare the effects of market volatilities on Wesdome Gold 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 Wesdome Gold with a short position of Seabridge Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesdome Gold and Seabridge Gold.
Diversification Opportunities for Wesdome Gold and Seabridge Gold
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wesdome and Seabridge is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Wesdome Gold Mines and Seabridge Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seabridge Gold and Wesdome 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 Wesdome Gold Mines 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 Wesdome Gold i.e., Wesdome Gold and Seabridge Gold go up and down completely randomly.
Pair Corralation between Wesdome Gold and Seabridge Gold
Assuming the 90 days horizon Wesdome Gold Mines is expected to generate 1.26 times more return on investment than Seabridge Gold. However, Wesdome Gold is 1.26 times more volatile than Seabridge Gold. It trades about 0.2 of its potential returns per unit of risk. Seabridge Gold is currently generating about 0.06 per unit of risk. If you would invest 750.00 in Wesdome Gold Mines on February 22, 2024 and sell it today you would earn a total of 112.00 from holding Wesdome Gold Mines or generate 14.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Wesdome Gold Mines vs. Seabridge Gold
Performance |
Timeline |
Wesdome Gold Mines |
Seabridge Gold |
Wesdome Gold and Seabridge Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wesdome Gold and Seabridge Gold
The main advantage of trading using opposite Wesdome Gold and Seabridge Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesdome Gold 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.Wesdome Gold vs. Reyna SilverCorp | Wesdome Gold vs. Morningstar Unconstrained Allocation | Wesdome Gold vs. Spring Valley Acquisition | Wesdome Gold vs. CarMax Inc |
Seabridge Gold vs. Franco Nevada | Seabridge Gold vs. Wheaton Precious Metals | Seabridge Gold vs. Osisko Gold Ro | Seabridge Gold vs. Sandstorm Gold Ltd |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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