Correlation Between Kinross Gold and West African
Can any of the company-specific risk be diversified away by investing in both Kinross Gold and West African 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 West African into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinross Gold and West African Resources, you can compare the effects of market volatilities on Kinross Gold and West African 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 West African. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinross Gold and West African.
Diversification Opportunities for Kinross Gold and West African
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kinross and West is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Kinross Gold and West African Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on West African Resources 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 West African. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of West African Resources has no effect on the direction of Kinross Gold i.e., Kinross Gold and West African go up and down completely randomly.
Pair Corralation between Kinross Gold and West African
Considering the 90-day investment horizon Kinross Gold is expected to generate 1.15 times more return on investment than West African. However, Kinross Gold is 1.15 times more volatile than West African Resources. It trades about -0.09 of its potential returns per unit of risk. West African Resources is currently generating about -0.2 per unit of risk. If you would invest 1,070 in Kinross Gold on August 30, 2024 and sell it today you would lose (90.00) from holding Kinross Gold or give up 8.41% 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. West African Resources
Performance |
| Timeline |
| Kinross Gold |
| West African Resources |
Kinross Gold and West African Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinross Gold and West African
The main advantage of trading using opposite Kinross Gold and West African positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinross Gold position performs unexpectedly, West African 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 West African will offset losses from the drop in West African's long position.| Kinross Gold vs. Franco Nevada | Kinross Gold vs. Osisko Gold Ro | Kinross Gold vs. Sandstorm Gold Ltd | Kinross Gold vs. Royal Gold |
| West African vs. Harmony Gold Mining | West African vs. AngloGold Ashanti plc | West African vs. Gold Fields Ltd | West African 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |