X
<

Reading the Rise in Gold and How It Moves the Dollar

PART:
1 2 3 4 5 6
Part 4
Reading the Rise in Gold and How It Moves the Dollar PART 4 OF 6

Reading the Correlation Trend of the Mining Stocks

Miners’ correlation

In this part, we’ll examine the relationships that some miners have with the precious metals they mine. A correlation analysis can give us an idea about mining stocks’ price movements and how closely they are tied to changes in precious metal prices.

In this part of the series, we’ll see how variations in the prices of Royal Gold (RGLD), Goldcorp (GG), Agnico Eagle Mines (AEM), and Primero Mining (PPP) correlate with gold.

Reading the Correlation Trend of the Mining Stocks

Interested in NUGT? Don't miss the next report.

Receive e-mail alerts for new research on NUGT

Success! You are now receiving e-mail alerts for new research. A temporary password for your new Market Realist account has been sent to your e-mail address.

Success! has been added to your Ticker Alerts.

Success! has been added to your Ticker Alerts. Subscriptions can be managed in your user profile.

The leveraged mining stocks have also recovered in the past few weeks. The Direxion Daily Gold Miners ETF (NUGT) and the Direxion Daily Junior Gold Miners ETF (JNUG) fell 2.2% and 3%, respectively, on August 2, 2017.

Correlation trends

Primero and Goldcorp have seen the highest correlation with gold, while Goldcorp has the lowest correlation. Among these four miners, Primero has seen an upward trending correlation with gold, while Royal Gold experienced a downward correlation trend. However, the other two miners have a mixed correlation trend.

An increase in correlation highlights that a price change in gold could cause mining stocks to trade in the same direction. A drop in correlation suggests that mining stocks could move with gold.

Goldcorp has a three-year correlation of ~0.51 with gold and a year-to-date correlation of ~0.61, which suggests that the stock has moved in the same direction as gold ~61.0% of the time in the past year. These correlations can move in different directions at various times.

X

Please select a profession that best describes you: