Correlation Between Eldorado Gold and Kinross Gold
Can any of the company-specific risk be diversified away by investing in both Eldorado 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 Eldorado 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 Eldorado Gold Corp and Kinross Gold Corp, you can compare the effects of market volatilities on Eldorado 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 Eldorado Gold with a short position of Kinross Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eldorado Gold and Kinross Gold.
Diversification Opportunities for Eldorado Gold and Kinross Gold
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eldorado and Kinross is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Eldorado Gold Corp 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 Eldorado 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 Eldorado Gold Corp 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 Eldorado Gold i.e., Eldorado Gold and Kinross Gold go up and down completely randomly.
Pair Corralation between Eldorado Gold and Kinross Gold
Assuming the 90 days trading horizon Eldorado Gold is expected to generate 1.97 times less return on investment than Kinross Gold. But when comparing it to its historical volatility, Eldorado Gold Corp is 1.04 times less risky than Kinross Gold. It trades about 0.07 of its potential returns per unit of risk. Kinross Gold Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 734.00 in Kinross Gold Corp on August 28, 2024 and sell it today you would earn a total of 636.00 from holding Kinross Gold Corp or generate 86.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eldorado Gold Corp vs. Kinross Gold Corp
Performance |
| Timeline |
| Eldorado Gold Corp |
| Kinross Gold Corp |
Eldorado Gold and Kinross Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eldorado Gold and Kinross Gold
The main advantage of trading using opposite Eldorado Gold and Kinross Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eldorado 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.| Eldorado Gold vs. IAMGold | Eldorado Gold vs. Kinross Gold Corp | Eldorado Gold vs. Alamos Gold | Eldorado Gold vs. Agnico Eagle Mines |
| 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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