Correlation Between Seabridge Gold and Kinross Gold

Can any of the company-specific risk be diversified away by investing in both Seabridge Gold and Kinross 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 Seabridge Gold and Kinross Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Seabridge Gold and Kinross Gold, you can compare the effects of market volatilities on Seabridge Gold and Kinross 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 Seabridge Gold with a short position of Kinross Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seabridge Gold and Kinross Gold.

Diversification Opportunities for Seabridge Gold and Kinross Gold

0.39

Correlation Coefficient

Seabridge Gold  Kinross Gold

Weak diversification

The 3 months correlation between Seabridge and Kinross is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Seabridge Gold and Kinross Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinross Gold 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 Kinross Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinross Gold has no effect on the direction of Seabridge Gold i.e., Seabridge Gold and Kinross Gold go up and down completely randomly.

Pair Corralation between Seabridge Gold and Kinross Gold

Allowing for the 90-day total investment horizon Seabridge Gold is expected to under-perform the Kinross Gold. In addition to that, Seabridge Gold is 1.01 times more volatile than Kinross Gold. It trades about -0.1 of its total potential returns per unit of risk. Kinross Gold is currently generating about 0.06 per unit of volatility. If you would invest  904.00  in Kinross Gold on August 30, 2024 and sell it today you would earn a total of  76.00  from holding Kinross Gold or generate 8.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Seabridge Gold  vs.  Kinross Gold

Seabridge Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Seabridge Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Kinross Gold

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kinross Gold are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical and fundamental indicators, Kinross Gold may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Seabridge Gold and Kinross Gold

The main advantage of trading using opposite Seabridge Gold and Kinross Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seabridge Gold position performs unexpectedly, Kinross 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 Kinross Gold will offset losses from the drop in Kinross Gold's long position.

The idea behind Seabridge Gold and Kinross 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.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..