Correlation Between Kinross Gold and Royal Gold
Can any of the company-specific risk be diversified away by investing in both Kinross Gold and Royal 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 Royal 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 Royal Gold, you can compare the effects of market volatilities on Kinross Gold and Royal 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 Royal Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinross Gold and Royal Gold.
Diversification Opportunities for Kinross Gold and Royal Gold
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kinross and Royal is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Kinross Gold and Royal Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal 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 are associated (or correlated) with Royal Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Gold has no effect on the direction of Kinross Gold i.e., Kinross Gold and Royal Gold go up and down completely randomly.
Pair Corralation between Kinross Gold and Royal Gold
Considering the 90-day investment horizon Kinross Gold is expected to under-perform the Royal Gold. In addition to that, Kinross Gold is 1.81 times more volatile than Royal Gold. It trades about -0.06 of its total potential returns per unit of risk. Royal Gold is currently generating about -0.08 per unit of volatility. If you would invest 15,427 in Royal Gold on August 23, 2024 and sell it today you would lose (609.00) from holding Royal Gold or give up 3.95% 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. Royal Gold
Performance |
| Timeline |
| Kinross Gold |
| Royal Gold |
Kinross Gold and Royal Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinross Gold and Royal Gold
The main advantage of trading using opposite Kinross Gold and Royal Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinross Gold position performs unexpectedly, Royal 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 Royal Gold will offset losses from the drop in Royal 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 |
| Royal Gold vs. Centerra Gold | Royal Gold vs. Gold Fields Ltd | Royal Gold vs. Eldorado Gold Corp | Royal Gold vs. Osisko Gold Ro |
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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