Correlation Between Kinross Gold and Meta Platforms

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Can any of the company-specific risk be diversified away by investing in both Kinross Gold and Meta Platforms 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 Meta Platforms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinross Gold and Meta Platforms, you can compare the effects of market volatilities on Kinross Gold and Meta Platforms 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 Meta Platforms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinross Gold and Meta Platforms.

Diversification Opportunities for Kinross Gold and Meta Platforms

-0.52
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Kinross and Meta is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Kinross Gold and Meta Platforms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Platforms 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 Meta Platforms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Platforms has no effect on the direction of Kinross Gold i.e., Kinross Gold and Meta Platforms go up and down completely randomly.

Pair Corralation between Kinross Gold and Meta Platforms

If you would invest  572.00  in Kinross Gold on January 21, 2024 and sell it today you would earn a total of  105.00  from holding Kinross Gold or generate 18.36% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy4.55%
ValuesDaily Returns

Kinross Gold  vs.  Meta Platforms

 Performance 
       Timeline  
Kinross Gold 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Kinross Gold are ranked lower than 12 (%) 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.
Meta Platforms 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Meta Platforms has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Meta Platforms is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kinross Gold and Meta Platforms Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kinross Gold and Meta Platforms

The main advantage of trading using opposite Kinross Gold and Meta Platforms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinross Gold position performs unexpectedly, Meta Platforms 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 Meta Platforms will offset losses from the drop in Meta Platforms' long position.
The idea behind Kinross Gold and Meta Platforms 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.
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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