Correlation Between Suncor Energy and Kinross Gold
Can any of the company-specific risk be diversified away by investing in both Suncor Energy 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 Suncor Energy and Kinross Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suncor Energy and Kinross Gold Corp, you can compare the effects of market volatilities on Suncor Energy 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 Suncor Energy with a short position of Kinross Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suncor Energy and Kinross Gold.
Diversification Opportunities for Suncor Energy and Kinross Gold
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Suncor and Kinross is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Suncor Energy and Kinross Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinross Gold Corp and Suncor Energy 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 Suncor Energy 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 Corp has no effect on the direction of Suncor Energy i.e., Suncor Energy and Kinross Gold go up and down completely randomly.
Pair Corralation between Suncor Energy and Kinross Gold
Assuming the 90 days horizon Suncor Energy is expected to generate 0.46 times more return on investment than Kinross Gold. However, Suncor Energy is 2.18 times less risky than Kinross Gold. It trades about 0.13 of its potential returns per unit of risk. Kinross Gold Corp is currently generating about -0.06 per unit of risk. If you would invest 5,343 in Suncor Energy on August 28, 2024 and sell it today you would earn a total of 220.00 from holding Suncor Energy or generate 4.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suncor Energy vs. Kinross Gold Corp
Performance |
| Timeline |
| Suncor Energy |
| Kinross Gold Corp |
Suncor Energy and Kinross Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suncor Energy and Kinross Gold
The main advantage of trading using opposite Suncor Energy and Kinross Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suncor Energy 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.| Suncor Energy vs. Enbridge | Suncor Energy vs. Canadian Natural Resources | Suncor Energy vs. Toronto Dominion Bank | Suncor Energy vs. Bank of Nova |
| Kinross Gold vs. Barrick Gold Corp | Kinross Gold vs. Eldorado Gold Corp | Kinross Gold vs. IAMGold | Kinross Gold vs. Agnico Eagle Mines |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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