Correlation Between Kinross Gold and IAMGold
Can any of the company-specific risk be diversified away by investing in both Kinross Gold and IAMGold 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 IAMGold 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 IAMGold, you can compare the effects of market volatilities on Kinross Gold and IAMGold 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 IAMGold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinross Gold and IAMGold.
Diversification Opportunities for Kinross Gold and IAMGold
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinross and IAMGold is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Kinross Gold Corp and IAMGold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IAMGold 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 IAMGold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IAMGold has no effect on the direction of Kinross Gold i.e., Kinross Gold and IAMGold go up and down completely randomly.
Pair Corralation between Kinross Gold and IAMGold
Given the investment horizon of 90 days Kinross Gold Corp is expected to under-perform the IAMGold. But the stock apears to be less risky and, when comparing its historical volatility, Kinross Gold Corp is 1.04 times less risky than IAMGold. The stock trades about -0.06 of its potential returns per unit of risk. The IAMGold is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 822.00 in IAMGold on August 24, 2024 and sell it today you would lose (27.00) from holding IAMGold or give up 3.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinross Gold Corp vs. IAMGold
Performance |
| Timeline |
| Kinross Gold Corp |
| IAMGold |
Kinross Gold and IAMGold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinross Gold and IAMGold
The main advantage of trading using opposite Kinross Gold and IAMGold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinross Gold position performs unexpectedly, IAMGold 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 IAMGold will offset losses from the drop in IAMGold'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 |
| IAMGold vs. Eldorado Gold Corp | IAMGold vs. Kinross Gold Corp | IAMGold vs. Alamos Gold | IAMGold vs. New Gold |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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