Correlation Between Kinross Gold and Eldorado Gold
Can any of the company-specific risk be diversified away by investing in both Kinross Gold and Eldorado 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 Eldorado Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinross Gold and Eldorado Gold Corp, you can compare the effects of market volatilities on Kinross Gold and Eldorado 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 Eldorado Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinross Gold and Eldorado Gold.
Diversification Opportunities for Kinross Gold and Eldorado Gold
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kinross and Eldorado is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Kinross Gold and Eldorado Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eldorado Gold Corp 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 are associated (or correlated) with Eldorado Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eldorado Gold Corp has no effect on the direction of Kinross Gold i.e., Kinross Gold and Eldorado Gold go up and down completely randomly.
Pair Corralation between Kinross Gold and Eldorado Gold
Considering the 90-day investment horizon Kinross Gold is expected to generate 1.2 times more return on investment than Eldorado Gold. However, Kinross Gold is 1.2 times more volatile than Eldorado Gold Corp. It trades about -0.01 of its potential returns per unit of risk. Eldorado Gold Corp is currently generating about -0.04 per unit of risk. If you would invest 1,044 in Kinross Gold on August 27, 2024 and sell it today you would lose (22.00) from holding Kinross Gold or give up 2.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinross Gold vs. Eldorado Gold Corp
Performance |
| Timeline |
| Kinross Gold |
| Eldorado Gold Corp |
Kinross Gold and Eldorado Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinross Gold and Eldorado Gold
The main advantage of trading using opposite Kinross Gold and Eldorado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinross Gold position performs unexpectedly, Eldorado 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 Eldorado Gold will offset losses from the drop in Eldorado Gold's long position.| Kinross Gold vs. Pan American Silver | Kinross Gold vs. Newmont Goldcorp Corp | Kinross Gold vs. Wheaton Precious Metals | Kinross Gold vs. Franco Nevada |
| Eldorado Gold vs. IAMGold | Eldorado Gold vs. Kinross Gold | Eldorado Gold vs. Agnico Eagle Mines | Eldorado Gold vs. Gold Fields Ltd |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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