Correlation Between Kinross Gold and Pan American
Can any of the company-specific risk be diversified away by investing in both Kinross Gold and Pan American 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 Pan American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinross Gold and Pan American Silver, you can compare the effects of market volatilities on Kinross Gold and Pan American 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 Pan American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinross Gold and Pan American.
Diversification Opportunities for Kinross Gold and Pan American
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kinross and Pan is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Kinross Gold and Pan American Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan American Silver 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 Pan American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan American Silver has no effect on the direction of Kinross Gold i.e., Kinross Gold and Pan American go up and down completely randomly.
Pair Corralation between Kinross Gold and Pan American
Considering the 90-day investment horizon Kinross Gold is expected to generate 1.32 times more return on investment than Pan American. However, Kinross Gold is 1.32 times more volatile than Pan American Silver. It trades about -0.06 of its potential returns per unit of risk. Pan American Silver is currently generating about -0.18 per unit of risk. If you would invest 1,070 in Kinross Gold on August 23, 2024 and sell it today you would lose (62.00) from holding Kinross Gold or give up 5.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinross Gold vs. Pan American Silver
Performance |
| Timeline |
| Kinross Gold |
| Pan American Silver |
Kinross Gold and Pan American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinross Gold and Pan American
The main advantage of trading using opposite Kinross Gold and Pan American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinross Gold position performs unexpectedly, Pan American 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 Pan American will offset losses from the drop in Pan American'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 |
| Pan American vs. Newmont Goldcorp Corp | Pan American vs. Wheaton Precious Metals | Pan American vs. Franco Nevada | Pan American 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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