Correlation Between Gold Fields and Centerra Gold
Can any of the company-specific risk be diversified away by investing in both Gold Fields and Centerra 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 Gold Fields and Centerra Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Fields Ltd and Centerra Gold, you can compare the effects of market volatilities on Gold Fields and Centerra 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 Gold Fields with a short position of Centerra Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Fields and Centerra Gold.
Diversification Opportunities for Gold Fields and Centerra Gold
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gold and Centerra is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd and Centerra Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centerra Gold and Gold Fields 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 Gold Fields Ltd are associated (or correlated) with Centerra Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centerra Gold has no effect on the direction of Gold Fields i.e., Gold Fields and Centerra Gold go up and down completely randomly.
Pair Corralation between Gold Fields and Centerra Gold
Considering the 90-day investment horizon Gold Fields Ltd is expected to generate 1.21 times more return on investment than Centerra Gold. However, Gold Fields is 1.21 times more volatile than Centerra Gold. It trades about 0.02 of its potential returns per unit of risk. Centerra Gold is currently generating about 0.02 per unit of risk. If you would invest 1,472 in Gold Fields Ltd on August 24, 2024 and sell it today you would earn a total of 54.00 from holding Gold Fields Ltd or generate 3.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Fields Ltd vs. Centerra Gold
Performance |
| Timeline |
| Gold Fields |
| Centerra Gold |
Gold Fields and Centerra Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Fields and Centerra Gold
The main advantage of trading using opposite Gold Fields and Centerra Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields position performs unexpectedly, Centerra 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 Centerra Gold will offset losses from the drop in Centerra Gold's long position.| Gold Fields vs. Agnico Eagle Mines | Gold Fields vs. Kinross Gold | Gold Fields vs. Harmony Gold Mining | Gold Fields vs. Franco Nevada |
| Centerra Gold vs. Gold Fields Ltd | Centerra Gold vs. Eldorado Gold Corp | Centerra Gold vs. Osisko Gold Ro | Centerra Gold vs. SSR Mining |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |