Correlation Between Red Pine and Kinross Gold
Can any of the company-specific risk be diversified away by investing in both Red Pine 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 Red Pine and Kinross Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Red Pine Exploration and Kinross Gold, you can compare the effects of market volatilities on Red Pine 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 Red Pine with a short position of Kinross Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Pine and Kinross Gold.
Diversification Opportunities for Red Pine and Kinross Gold
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Red and Kinross is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Red Pine Exploration and Kinross Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinross Gold and Red Pine 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 Red Pine Exploration 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 Red Pine i.e., Red Pine and Kinross Gold go up and down completely randomly.
Pair Corralation between Red Pine and Kinross Gold
Assuming the 90 days horizon Red Pine Exploration is expected to generate 1.04 times more return on investment than Kinross Gold. However, Red Pine is 1.04 times more volatile than Kinross Gold. It trades about -0.02 of its potential returns per unit of risk. Kinross Gold is currently generating about -0.02 per unit of risk. If you would invest 9.16 in Red Pine Exploration on September 2, 2024 and sell it today you would lose (0.25) from holding Red Pine Exploration or give up 2.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Red Pine Exploration vs. Kinross Gold
Performance |
| Timeline |
| Red Pine Exploration |
| Kinross Gold |
Red Pine and Kinross Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Pine and Kinross Gold
The main advantage of trading using opposite Red Pine and Kinross Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Pine 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.| Red Pine vs. Endurance Gold | Red Pine vs. Altamira Gold Corp | Red Pine vs. Grande Portage Resources | Red Pine vs. Tectonic Metals |
| Kinross Gold vs. Fortitude Gold Corp | Kinross Gold vs. New Gold | Kinross Gold vs. Galiano Gold | Kinross Gold vs. GoldMining |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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