Correlation Between Seabridge Gold and Chemours

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

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

Diversification Opportunities for Seabridge Gold and Chemours

-0.36

Correlation Coefficient

Seabridge Gold  Chemours

Very good diversification

The 3 months correlation between Seabridge and Chemours is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Seabridge Gold and Chemours Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours 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 Chemours. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemours has no effect on the direction of Seabridge Gold i.e., Seabridge Gold and Chemours go up and down completely randomly.

Pair Corralation between Seabridge Gold and Chemours

Allowing for the 90-day total investment horizon Seabridge Gold is expected to generate 0.9 times more return on investment than Chemours. However, Seabridge Gold is 1.11 times less risky than Chemours. It trades about 0.1 of its potential returns per unit of risk. Chemours Co is currently generating about 0.07 per unit of risk. If you would invest  1,512  in Seabridge Gold on January 28, 2024 and sell it today you would earn a total of  77.00  from holding Seabridge Gold or generate 5.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Seabridge Gold  vs.  Chemours Co

Seabridge Gold

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Seabridge Gold are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, Seabridge Gold sustained solid returns over the last few months and may actually be approaching a breakup point.

Chemours

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chemours Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Chemours is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Seabridge Gold and Chemours

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

The idea behind Seabridge Gold and Chemours Co 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 Stocks Directory module to find actively traded stocks across global markets.