Correlation Between Pan American and Kinross Gold
Can any of the company-specific risk be diversified away by investing in both Pan American and Kinross 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 Pan American and Kinross Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pan American Silver and Kinross Gold, you can compare the effects of market volatilities on Pan American and Kinross 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 Pan American with a short position of Kinross Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan American and Kinross Gold.
Diversification Opportunities for Pan American and Kinross Gold
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pan and Kinross is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Pan American Silver and Kinross Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinross Gold and Pan American 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 Pan American Silver are associated (or correlated) with Kinross Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinross Gold has no effect on the direction of Pan American i.e., Pan American and Kinross Gold go up and down completely randomly.
Pair Corralation between Pan American and Kinross Gold
Given the investment horizon of 90 days Pan American is expected to generate 1.29 times less return on investment than Kinross Gold. In addition to that, Pan American is 1.19 times more volatile than Kinross Gold. It trades about 0.07 of its total potential returns per unit of risk. Kinross Gold is currently generating about 0.1 per unit of volatility. If you would invest 582.00 in Kinross Gold on August 26, 2024 and sell it today you would earn a total of 440.00 from holding Kinross Gold or generate 75.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pan American Silver vs. Kinross Gold
Performance |
| Timeline |
| Pan American Silver |
| Kinross Gold |
Pan American and Kinross Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan American and Kinross Gold
The main advantage of trading using opposite Pan American and Kinross Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan American position performs unexpectedly, Kinross 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 Kinross Gold will offset losses from the drop in Kinross Gold's long position.| Pan American vs. Newmont Goldcorp Corp | Pan American vs. Wheaton Precious Metals | Pan American vs. Franco Nevada | Pan American vs. Kinross Gold |
| Kinross Gold vs. Pan American Silver | Kinross Gold vs. Newmont Goldcorp Corp | Kinross Gold vs. Wheaton Precious Metals | Kinross Gold vs. Franco Nevada |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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