Correlation Between Coeur Mining and Kinross Gold

Can any of the company-specific risk be diversified away by investing in both Coeur Mining 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 Coeur Mining and Kinross Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Coeur Mining and Kinross Gold, you can compare the effects of market volatilities on Coeur Mining 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 Coeur Mining with a short position of Kinross Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coeur Mining and Kinross Gold.

Diversification Opportunities for Coeur Mining and Kinross Gold

0.69

Correlation Coefficient

Coeur Mining  Kinross Gold

Poor diversification

The 3 months correlation between Coeur and Kinross is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Coeur Mining and Kinross Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinross Gold and Coeur Mining 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 Coeur Mining 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 Coeur Mining i.e., Coeur Mining and Kinross Gold go up and down completely randomly.

Pair Corralation between Coeur Mining and Kinross Gold

Considering the 90-day investment horizon Coeur Mining is expected to generate 1.12 times less return on investment than Kinross Gold. In addition to that, Coeur Mining is 1.7 times more volatile than Kinross Gold. It trades about 0.06 of its total potential returns per unit of risk. Kinross Gold is currently generating about 0.11 per unit of volatility. If you would invest  352.00  in Kinross Gold on November 19, 2024 and sell it today you would earn a total of  775.00  from holding Kinross Gold or generate 220.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Coeur Mining  vs.  Kinross Gold

Coeur Mining

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Coeur Mining are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Coeur Mining is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Kinross Gold

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kinross Gold are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Kinross Gold exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Coeur Mining and Kinross Gold

The main advantage of trading using opposite Coeur Mining and Kinross Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coeur Mining 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.

The idea behind Coeur Mining and Kinross Gold pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.