Correlation Between Cleveland Cliffs and Kinross Gold

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

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

Diversification Opportunities for Cleveland Cliffs and Kinross Gold

-0.72

Correlation Coefficient

Cleveland Cliffs  Kinross Gold

Pay attention - limited upside

The 3 months correlation between Cleveland and Kinross is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Cleveland Cliffs and Kinross Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinross Gold and Cleveland Cliffs 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 Cleveland Cliffs are associated (or correlated) with Kinross Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinross Gold has no effect on the direction of Cleveland Cliffs i.e., Cleveland Cliffs and Kinross Gold go up and down completely randomly.

Pair Corralation between Cleveland Cliffs and Kinross Gold

Considering the 90-day investment horizon Cleveland Cliffs is expected to generate 27.52 times less return on investment than Kinross Gold. In addition to that, Cleveland Cliffs is 2.08 times more volatile than Kinross Gold. It trades about 0.0 of its total potential returns per unit of risk. Kinross Gold is currently generating about 0.13 per unit of volatility. If you would invest  1,142  in Kinross Gold on February 3, 2025 and sell it today you would earn a total of  265.00  from holding Kinross Gold or generate 23.2% return on investment over 90 days.

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

Cleveland Cliffs  vs.  Kinross Gold

Cleveland Cliffs

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cleveland Cliffs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Cleveland Cliffs is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Kinross Gold

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kinross Gold are ranked lower than 10 (%) 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.

Pair Trading with Cleveland Cliffs and Kinross Gold

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

The idea behind Cleveland Cliffs and Kinross 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.