Correlation Between GoldMining and Kinross Gold
Can any of the company-specific risk be diversified away by investing in both GoldMining 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 GoldMining and Kinross Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoldMining and Kinross Gold, you can compare the effects of market volatilities on GoldMining 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 GoldMining with a short position of Kinross Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoldMining and Kinross Gold.
Diversification Opportunities for GoldMining and Kinross Gold
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between GoldMining and Kinross is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining and Kinross Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinross Gold and GoldMining 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 GoldMining 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 GoldMining i.e., GoldMining and Kinross Gold go up and down completely randomly.
Pair Corralation between GoldMining and Kinross Gold
Given the investment horizon of 90 days GoldMining is expected to under-perform the Kinross Gold. But the stock apears to be less risky and, when comparing its historical volatility, GoldMining is 1.24 times less risky than Kinross Gold. The stock trades about -0.04 of its potential returns per unit of risk. The Kinross Gold is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 998.00 in Kinross Gold on September 2, 2024 and sell it today you would lose (27.00) from holding Kinross Gold or give up 2.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GoldMining vs. Kinross Gold
Performance |
| Timeline |
| GoldMining |
| Kinross Gold |
GoldMining and Kinross Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoldMining and Kinross Gold
The main advantage of trading using opposite GoldMining and Kinross Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining 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.| GoldMining vs. Gold Royalty Corp | GoldMining vs. Uranium Royalty Corp | GoldMining vs. Metalla Royalty Streaming | GoldMining vs. Equinox Gold Corp |
| Kinross Gold vs. Fortitude Gold Corp | Kinross Gold vs. New Gold | Kinross Gold vs. Galiano Gold | Kinross Gold vs. GoldMining |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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