Correlation Between Kinross Gold and Sokoman Minerals

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

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

Diversification Opportunities for Kinross Gold and Sokoman Minerals

-0.69

Correlation Coefficient

Kinross Gold  Sokoman Minerals

Excellent diversification

The 3 months correlation between Kinross and Sokoman is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Kinross Gold and Sokoman Minerals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sokoman Minerals Corp 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 Sokoman Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sokoman Minerals Corp has no effect on the direction of Kinross Gold i.e., Kinross Gold and Sokoman Minerals go up and down completely randomly.

Pair Corralation between Kinross Gold and Sokoman Minerals

Considering the 90-day investment horizon Kinross Gold is expected to generate 0.38 times more return on investment than Sokoman Minerals. However, Kinross Gold is 2.64 times less risky than Sokoman Minerals. It trades about 0.33 of its potential returns per unit of risk. Sokoman Minerals Corp is currently generating about -0.03 per unit of risk. If you would invest  490.00  in Kinross Gold on February 22, 2024 and sell it today you would earn a total of  303.00  from holding Kinross Gold or generate 61.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Kinross Gold  vs.  Sokoman Minerals Corp

Kinross Gold

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Kinross Gold are ranked lower than 26 (%) 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.

Sokoman Minerals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sokoman Minerals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Kinross Gold and Sokoman Minerals

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

The idea behind Kinross Gold and Sokoman Minerals Corp 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.