Correlation Between SSR Mining and Gold Fields

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

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

Diversification Opportunities for SSR Mining and Gold Fields

-0.26

Correlation Coefficient

SSR Mining  Gold Fields

Very good diversification

The 3 months correlation between SSR and Gold is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding SSR Mining and Gold Fields Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Fields and SSR 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 SSR Mining are associated (or correlated) with Gold Fields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Fields has no effect on the direction of SSR Mining i.e., SSR Mining and Gold Fields go up and down completely randomly.

Pair Corralation between SSR Mining and Gold Fields

Given the investment horizon of 90 days SSR Mining is expected to under-perform the Gold Fields. In addition to that, SSR Mining is 1.21 times more volatile than Gold Fields Ltd. It trades about -0.15 of its total potential returns per unit of risk. Gold Fields Ltd is currently generating about -0.07 per unit of volatility. If you would invest  1,489  in Gold Fields Ltd on October 12, 2024 and sell it today you would lose (51.00) from holding Gold Fields Ltd or give up 3.43% of portfolio value over 90 days.

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

SSR Mining  vs.  Gold Fields Ltd

SSR Mining

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SSR Mining are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, SSR Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Gold Fields

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gold Fields Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Gold Fields is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with SSR Mining and Gold Fields

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

The idea behind SSR Mining and Gold Fields Ltd 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.