Correlation Between Gold Fields and Hycroft Mining
Can any of the company-specific risk be diversified away by investing in both Gold Fields and Hycroft Mining 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 Hycroft Mining 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 Hycroft Mining Holding, you can compare the effects of market volatilities on Gold Fields and Hycroft Mining 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 Hycroft Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Fields and Hycroft Mining.
Diversification Opportunities for Gold Fields and Hycroft Mining
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gold and Hycroft is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd and Hycroft Mining Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hycroft Mining Holding 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 Hycroft Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hycroft Mining Holding has no effect on the direction of Gold Fields i.e., Gold Fields and Hycroft Mining go up and down completely randomly.
Pair Corralation between Gold Fields and Hycroft Mining
Considering the 90-day investment horizon Gold Fields Ltd is expected to under-perform the Hycroft Mining. But the stock apears to be less risky and, when comparing its historical volatility, Gold Fields Ltd is 1.24 times less risky than Hycroft Mining. The stock trades about -0.23 of its potential returns per unit of risk. The Hycroft Mining Holding is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 255.00 in Hycroft Mining Holding on August 27, 2024 and sell it today you would lose (18.00) from holding Hycroft Mining Holding or give up 7.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Fields Ltd vs. Hycroft Mining Holding
Performance |
| Timeline |
| Gold Fields |
| Hycroft Mining Holding |
Gold Fields and Hycroft Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Fields and Hycroft Mining
The main advantage of trading using opposite Gold Fields and Hycroft Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields position performs unexpectedly, Hycroft Mining 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 Hycroft Mining will offset losses from the drop in Hycroft Mining'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 |
| Hycroft Mining vs. Agnico Eagle Mines | Hycroft Mining vs. B2Gold Corp | Hycroft Mining vs. Pan American Silver | Hycroft Mining vs. Gold Fields Ltd |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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