Correlation Between IAMGold and Kinross Gold
Can any of the company-specific risk be diversified away by investing in both IAMGold 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 IAMGold and Kinross Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IAMGold and Kinross Gold, you can compare the effects of market volatilities on IAMGold 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 IAMGold with a short position of Kinross Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of IAMGold and Kinross Gold.
Diversification Opportunities for IAMGold and Kinross Gold
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IAMGold and Kinross is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding IAMGold and Kinross Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinross Gold and IAMGold 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 IAMGold 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 IAMGold i.e., IAMGold and Kinross Gold go up and down completely randomly.
Pair Corralation between IAMGold and Kinross Gold
Considering the 90-day investment horizon IAMGold is expected to generate 1.05 times more return on investment than Kinross Gold. However, IAMGold is 1.05 times more volatile than Kinross Gold. It trades about -0.04 of its potential returns per unit of risk. Kinross Gold is currently generating about -0.05 per unit of risk. If you would invest 593.00 in IAMGold on August 24, 2024 and sell it today you would lose (28.00) from holding IAMGold or give up 4.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
IAMGold vs. Kinross Gold
Performance |
| Timeline |
| IAMGold |
| Kinross Gold |
IAMGold and Kinross Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IAMGold and Kinross Gold
The main advantage of trading using opposite IAMGold and Kinross Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IAMGold 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.| IAMGold vs. Gold Fields Ltd | IAMGold vs. Barrick Gold Corp | IAMGold vs. Pan American Silver | IAMGold vs. Franco Nevada |
| Kinross Gold vs. Gold Fields Ltd | Kinross Gold vs. Barrick Gold Corp | Kinross Gold vs. Pan American Silver | 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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