Correlation Between Tesla and Seabridge Gold

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

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

Diversification Opportunities for Tesla and Seabridge Gold

-0.21

Correlation Coefficient

Tesla  Seabridge Gold

Very good diversification

The 3 months correlation between Tesla and Seabridge is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Tesla Inc CDR and Seabridge Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seabridge Gold and Tesla 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 Tesla Inc CDR 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 Tesla i.e., Tesla and Seabridge Gold go up and down completely randomly.

Pair Corralation between Tesla and Seabridge Gold

Assuming the 90 days trading horizon Tesla Inc CDR is expected to generate 1.27 times more return on investment than Seabridge Gold. However, Tesla is 1.27 times more volatile than Seabridge Gold. It trades about -0.06 of its potential returns per unit of risk. Seabridge Gold is currently generating about -0.11 per unit of risk. If you would invest  3,140  in Tesla Inc CDR on November 29, 2024 and sell it today you would lose (588.00) from holding Tesla Inc CDR or give up 18.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Tesla Inc CDR  vs.  Seabridge Gold

Tesla Inc CDR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tesla Inc CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Seabridge Gold

Risk-Adjusted Performance

Very Weak

Over the last 90 days Seabridge Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Tesla and Seabridge Gold

The main advantage of trading using opposite Tesla and Seabridge Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tesla 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 Tesla Inc CDR 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.

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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 CEOs Directory module to screen CEOs from public companies around the world.