Correlation Between IAMGold and Seabridge Gold

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

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

Diversification Opportunities for IAMGold and Seabridge Gold

0.54

Correlation Coefficient

IAMGold  Seabridge Gold

Very weak diversification

The 3 months correlation between IAMGold and Seabridge is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding IAMGold and Seabridge Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seabridge Gold and IAMGold 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 IAMGold 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 IAMGold i.e., IAMGold and Seabridge Gold go up and down completely randomly.

Pair Corralation between IAMGold and Seabridge Gold

Considering the 90-day investment horizon IAMGold is expected to generate 14.05 times less return on investment than Seabridge Gold. In addition to that, IAMGold is 1.31 times more volatile than Seabridge Gold. It trades about 0.01 of its total potential returns per unit of risk. Seabridge Gold is currently generating about 0.15 per unit of volatility. If you would invest  1,299  in Seabridge Gold on May 6, 2025 and sell it today you would earn a total of  303.00  from holding Seabridge Gold or generate 23.33% return on investment over 90 days.

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

IAMGold  vs.  Seabridge Gold

IAMGold

Risk-Adjusted Performance

Very Weak

Over the last 90 days IAMGold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, IAMGold is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Seabridge Gold

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Seabridge Gold are ranked lower than 11 (%) 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.

Pair Trading with IAMGold and Seabridge Gold

The main advantage of trading using opposite IAMGold and Seabridge Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IAMGold 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 IAMGold 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.