Correlation Between Kinross Gold and First Trust
Can any of the company-specific risk be diversified away by investing in both Kinross Gold and First Trust 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 First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinross Gold and First Trust Merger, you can compare the effects of market volatilities on Kinross Gold and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinross Gold and First Trust.
Diversification Opportunities for Kinross Gold and First Trust
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kinross and First is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Kinross Gold and First Trust Merger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Merger 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Merger has no effect on the direction of Kinross Gold i.e., Kinross Gold and First Trust go up and down completely randomly.
Pair Corralation between Kinross Gold and First Trust
Considering the 90-day investment horizon Kinross Gold is expected to generate 36.98 times more return on investment than First Trust. However, Kinross Gold is 36.98 times more volatile than First Trust Merger. It trades about 0.1 of its potential returns per unit of risk. First Trust Merger is currently generating about 0.26 per unit of risk. If you would invest 850.00 in Kinross Gold on April 5, 2025 and sell it today you would earn a total of 707.00 from holding Kinross Gold or generate 83.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinross Gold vs. First Trust Merger
Performance |
| Timeline |
| Kinross Gold |
| First Trust Merger |
Kinross Gold and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinross Gold and First Trust
The main advantage of trading using opposite Kinross Gold and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinross Gold position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Kinross Gold vs. Kingdee International Software | Kinross Gold vs. Rumble Inc | Kinross Gold vs. Wingstop | Kinross Gold vs. ON24 Inc |
| First Trust vs. First Trust Managed | First Trust vs. First Trust Multi Strategy | First Trust vs. First Trust Short | First Trust vs. First Trust Short |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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