Correlation Between Kinross Gold and Centerra Gold
Can any of the company-specific risk be diversified away by investing in both Kinross Gold 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 Kinross Gold and Centerra Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinross Gold Corp and Centerra Gold, you can compare the effects of market volatilities on Kinross Gold 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 Kinross Gold with a short position of Centerra Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinross Gold and Centerra Gold.
Diversification Opportunities for Kinross Gold and Centerra Gold
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kinross and Centerra is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Kinross Gold Corp and Centerra Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centerra Gold and Kinross Gold 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 Kinross Gold Corp 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 Kinross Gold i.e., Kinross Gold and Centerra Gold go up and down completely randomly.
Pair Corralation between Kinross Gold and Centerra Gold
Given the investment horizon of 90 days Kinross Gold Corp is expected to generate 1.28 times more return on investment than Centerra Gold. However, Kinross Gold is 1.28 times more volatile than Centerra Gold. It trades about -0.07 of its potential returns per unit of risk. Centerra Gold is currently generating about -0.29 per unit of risk. If you would invest 1,454 in Kinross Gold Corp on August 28, 2024 and sell it today you would lose (84.00) from holding Kinross Gold Corp or give up 5.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinross Gold Corp vs. Centerra Gold
Performance |
| Timeline |
| Kinross Gold Corp |
| Centerra Gold |
Kinross Gold and Centerra Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinross Gold and Centerra Gold
The main advantage of trading using opposite Kinross Gold and Centerra Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinross Gold 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.| Kinross Gold vs. Barrick Gold Corp | Kinross Gold vs. Eldorado Gold Corp | Kinross Gold vs. IAMGold | Kinross Gold vs. Agnico Eagle Mines |
| Centerra Gold vs. Alamos Gold | Centerra Gold vs. NovaGold Resources | Centerra Gold vs. Eldorado Gold Corp | Centerra Gold vs. IAMGold |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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