How Miners’ Correlation Is Moving in 2017
In this part of our series, we’ll look at 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’re tied to changes in precious metal prices.
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Mining funds Sprott Gold Miners (SGDM) and Global X Silver Miners (SIL) have seen losses of 4.1% and 4.9%, respectively, over the last five trading days. These funds are closely tied to precious metals, just as mining companies are.
Silver Wheaton has seen the highest correlation with gold while Franco-Nevada has the lowest correlation. Among these four miners, Primero and Silver Wheaton have seen a positively trending correlation with gold while Agnico and Franco-Nevada experienced a mixed correlation trend.
Silver Wheaton has a three-year correlation of ~0.70 with gold and a one-year correlation of ~0.81, which suggests the stock has moved in the same direction as gold ~81.0% of the time over the past year. These correlations can move in different directions at different times.