Correlation Between Royal Gold and Kinross Gold
Can any of the company-specific risk be diversified away by investing in both Royal Gold 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 Royal Gold and Kinross Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Royal Gold and Kinross Gold, you can compare the effects of market volatilities on Royal Gold 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 Royal Gold with a short position of Kinross Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Gold and Kinross Gold.
Diversification Opportunities for Royal Gold and Kinross Gold
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Royal and Kinross is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Royal Gold and Kinross Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinross Gold and Royal 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 Royal Gold 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 Royal Gold i.e., Royal Gold and Kinross Gold go up and down completely randomly.
Pair Corralation between Royal Gold and Kinross Gold
Given the investment horizon of 90 days Royal Gold is expected to generate 2.55 times less return on investment than Kinross Gold. But when comparing it to its historical volatility, Royal Gold is 1.71 times less risky than Kinross Gold. It trades about 0.04 of its potential returns per unit of risk. Kinross Gold is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 974.00 in Kinross Gold on August 26, 2024 and sell it today you would earn a total of 48.00 from holding Kinross Gold or generate 4.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Royal Gold vs. Kinross Gold
Performance |
| Timeline |
| Royal Gold |
| Kinross Gold |
Royal Gold and Kinross Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royal Gold and Kinross Gold
The main advantage of trading using opposite Royal Gold and Kinross Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Gold 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.| Royal Gold vs. Wheaton Precious Metals | Royal Gold vs. Agnico Eagle Mines | Royal Gold vs. Sandstorm Gold Ltd | Royal Gold vs. Osisko Gold Ro |
| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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