Correlation Between Gold Fields and Kinross Gold
Can any of the company-specific risk be diversified away by investing in both Gold Fields 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 Gold Fields and Kinross 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 Kinross Gold, you can compare the effects of market volatilities on Gold Fields 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 Gold Fields with a short position of Kinross Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Fields and Kinross Gold.
Diversification Opportunities for Gold Fields and Kinross Gold
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gold and Kinross is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd and Kinross Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinross 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 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 has no effect on the direction of Gold Fields i.e., Gold Fields and Kinross Gold go up and down completely randomly.
Pair Corralation between Gold Fields and Kinross Gold
Considering the 90-day investment horizon Gold Fields Ltd is expected to under-perform the Kinross Gold. But the stock apears to be less risky and, when comparing its historical volatility, Gold Fields Ltd is 1.13 times less risky than Kinross Gold. The stock trades about -0.31 of its potential returns per unit of risk. The Kinross Gold is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 1,070 in Kinross Gold on August 23, 2024 and sell it today you would lose (62.00) from holding Kinross Gold or give up 5.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Fields Ltd vs. Kinross Gold
Performance |
| Timeline |
| Gold Fields |
| Kinross Gold |
Gold Fields and Kinross Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Fields and Kinross Gold
The main advantage of trading using opposite Gold Fields and Kinross Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields 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.| Gold Fields vs. Agnico Eagle Mines | Gold Fields vs. Pan American Silver | Gold Fields vs. Kinross Gold | Gold Fields vs. B2Gold Corp |
| Kinross Gold vs. Pan American Silver | Kinross Gold vs. Newmont Goldcorp Corp | Kinross Gold vs. Wheaton Precious Metals | Kinross Gold vs. Franco Nevada |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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