Correlation Between Kinross Gold and Barrick Gold
Can any of the company-specific risk be diversified away by investing in both Kinross Gold and Barrick 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 Barrick 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 Barrick Gold Corp, you can compare the effects of market volatilities on Kinross Gold and Barrick 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 Barrick Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinross Gold and Barrick Gold.
Diversification Opportunities for Kinross Gold and Barrick Gold
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kinross and Barrick is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Kinross Gold and Barrick Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrick 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 Barrick Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrick Gold Corp has no effect on the direction of Kinross Gold i.e., Kinross Gold and Barrick Gold go up and down completely randomly.
Pair Corralation between Kinross Gold and Barrick Gold
Considering the 90-day investment horizon Kinross Gold is expected to generate 1.69 times more return on investment than Barrick Gold. However, Kinross Gold is 1.69 times more volatile than Barrick Gold Corp. It trades about -0.02 of its potential returns per unit of risk. Barrick Gold Corp is currently generating about -0.15 per unit of risk. If you would invest 1,053 in Kinross Gold on August 26, 2024 and sell it today you would lose (31.00) from holding Kinross Gold or give up 2.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinross Gold vs. Barrick Gold Corp
Performance |
| Timeline |
| Kinross Gold |
| Barrick Gold Corp |
Kinross Gold and Barrick Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinross Gold and Barrick Gold
The main advantage of trading using opposite Kinross Gold and Barrick Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinross Gold position performs unexpectedly, Barrick 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 Barrick Gold will offset losses from the drop in Barrick 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 |
| Barrick Gold vs. Agnico Eagle Mines | Barrick Gold vs. Pan American Silver | Barrick Gold vs. Wheaton Precious Metals | Barrick Gold vs. Kinross 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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