Correlation Between Centerra Gold and Kinross Gold
Can any of the company-specific risk be diversified away by investing in both Centerra Gold and Kinross 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 Centerra Gold and Kinross Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centerra Gold and Kinross Gold Corp, you can compare the effects of market volatilities on Centerra Gold and Kinross 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 Centerra Gold with a short position of Kinross Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centerra Gold and Kinross Gold.
Diversification Opportunities for Centerra Gold and Kinross Gold
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Centerra and Kinross is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Centerra Gold and Kinross Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinross Gold Corp and Centerra 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 Centerra Gold are associated (or correlated) with Kinross Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinross Gold Corp has no effect on the direction of Centerra Gold i.e., Centerra Gold and Kinross Gold go up and down completely randomly.
Pair Corralation between Centerra Gold and Kinross Gold
Assuming the 90 days horizon Centerra Gold is expected to under-perform the Kinross Gold. But the stock apears to be less risky and, when comparing its historical volatility, Centerra Gold is 1.28 times less risky than Kinross Gold. The stock trades about -0.29 of its potential returns per unit of risk. The Kinross Gold Corp is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 1,454 in Kinross Gold Corp on August 28, 2024 and sell it today you would lose (84.00) from holding Kinross Gold Corp or give up 5.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centerra Gold vs. Kinross Gold Corp
Performance |
| Timeline |
| Centerra Gold |
| Kinross Gold Corp |
Centerra Gold and Kinross Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centerra Gold and Kinross Gold
The main advantage of trading using opposite Centerra Gold and Kinross Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centerra Gold position performs unexpectedly, Kinross 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 Kinross Gold will offset losses from the drop in Kinross Gold's long position.| Centerra Gold vs. Alamos Gold | Centerra Gold vs. NovaGold Resources | Centerra Gold vs. Eldorado Gold Corp | Centerra Gold vs. IAMGold |
| Kinross Gold vs. Barrick Gold Corp | Kinross Gold vs. Eldorado Gold Corp | Kinross Gold vs. IAMGold | Kinross Gold vs. Agnico Eagle Mines |
Check out your portfolio center.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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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