Correlation Between Galiano Gold and Seabridge Gold

Can any of the company-specific risk be diversified away by investing in both Galiano 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 Galiano 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 Galiano Gold and Seabridge Gold, you can compare the effects of market volatilities on Galiano 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 Galiano Gold with a short position of Seabridge Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galiano Gold and Seabridge Gold.

Diversification Opportunities for Galiano Gold and Seabridge Gold

0.63

Correlation Coefficient

Galiano Gold  Seabridge Gold

Poor diversification

The 3 months correlation between Galiano and Seabridge is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Galiano Gold and Seabridge Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seabridge Gold and Galiano 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 Galiano Gold 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 Galiano Gold i.e., Galiano Gold and Seabridge Gold go up and down completely randomly.

Pair Corralation between Galiano Gold and Seabridge Gold

Considering the 90-day investment horizon Galiano Gold is expected to generate 1.17 times more return on investment than Seabridge Gold. However, Galiano Gold is 1.17 times more volatile than Seabridge Gold. It trades about 0.02 of its potential returns per unit of risk. Seabridge Gold is currently generating about -0.06 per unit of risk. If you would invest  140.00  in Galiano Gold on September 2, 2024 and sell it today you would earn a total of  1.00  from holding Galiano Gold or generate 0.71% return on investment over 90 days.

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

Galiano Gold  vs.  Seabridge Gold

Galiano Gold

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Galiano Gold are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Galiano Gold is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

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 latest unfluctuating performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Galiano Gold and Seabridge Gold

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

The idea behind Galiano Gold 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.