Correlation Between Kinross Gold and Alamos Gold

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

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

Diversification Opportunities for Kinross Gold and Alamos Gold

0.84

Correlation Coefficient

Kinross Gold  Alamos Gold

Very poor diversification

The 3 months correlation between Kinross and Alamos is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Kinross Gold and Alamos Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alamos Gold and Kinross 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 Kinross Gold are associated (or correlated) with Alamos Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alamos Gold has no effect on the direction of Kinross Gold i.e., Kinross Gold and Alamos Gold go up and down completely randomly.

Pair Corralation between Kinross Gold and Alamos Gold

Considering the 90-day investment horizon Kinross Gold is expected to generate 1.21 times less return on investment than Alamos Gold. In addition to that, Kinross Gold is 1.29 times more volatile than Alamos Gold. It trades about 0.21 of its total potential returns per unit of risk. Alamos Gold is currently generating about 0.33 per unit of volatility. If you would invest  1,805  in Alamos Gold on December 28, 2024 and sell it today you would earn a total of  852.00  from holding Alamos Gold or generate 47.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Kinross Gold  vs.  Alamos Gold

Kinross Gold

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kinross Gold are ranked lower than 16 (%) 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.

Alamos Gold

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Alamos Gold are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain technical and fundamental indicators, Alamos Gold demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kinross Gold and Alamos Gold

The main advantage of trading using opposite Kinross Gold and Alamos Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinross Gold position performs unexpectedly, Alamos 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 Alamos Gold will offset losses from the drop in Alamos Gold's long position.

The idea behind Kinross Gold and Alamos 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.