Correlation Between Seabridge Gold and Newmont Goldcorp

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

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

Diversification Opportunities for Seabridge Gold and Newmont Goldcorp

0.24

Correlation Coefficient

Seabridge Gold  Newmont Goldcorp

Modest diversification

The 3 months correlation between Seabridge and Newmont is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Seabridge Gold and Newmont Goldcorp Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont Goldcorp Corp 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 Newmont Goldcorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmont Goldcorp Corp has no effect on the direction of Seabridge Gold i.e., Seabridge Gold and Newmont Goldcorp go up and down completely randomly.

Pair Corralation between Seabridge Gold and Newmont Goldcorp

Allowing for the 90-day total investment horizon Seabridge Gold is expected to generate 2.31 times less return on investment than Newmont Goldcorp. In addition to that, Seabridge Gold is 1.79 times more volatile than Newmont Goldcorp Corp. It trades about 0.06 of its total potential returns per unit of risk. Newmont Goldcorp Corp is currently generating about 0.24 per unit of volatility. If you would invest  3,678  in Newmont Goldcorp Corp on December 29, 2024 and sell it today you would earn a total of  1,161  from holding Newmont Goldcorp Corp or generate 31.57% 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.  Newmont Goldcorp Corp

Seabridge Gold

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Seabridge Gold are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Seabridge Gold sustained solid returns over the last few months and may actually be approaching a breakup point.

Newmont Goldcorp Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Newmont Goldcorp Corp are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Newmont Goldcorp displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Seabridge Gold and Newmont Goldcorp

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

The idea behind Seabridge Gold and Newmont Goldcorp Corp 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.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.