Mining Stocks in 2017: Your Correlation Analysis
Thursday, September 28, 2017, was a mixed day for precious metal mining stocks as precious metals (except platinum) saw marginal revivals in prices. Most of the time, a rise in metals leads to a rise in mining stocks, but there are exceptions.
It’s important to read the correlation trends of gold mining stocks for a better understanding their relative movements. Below, we’ll analyze First Majestic Silver (AG), B2Gold (BTG), Royal Gold (RGLD), and Goldcorp (GG) for their correlations with gold.
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Mining funds closely track precious metals and their trends in price movements. The mining funds that have seen a fall over the past month include the VanEck Vectors Gold Miners (GDX) and the Global X Silver Miners (SIL), which have fallen 6.3% and 5.7%, respectively, on a 30-day trailing basis.
Among the four miners that we’re examining in this part, Goldcorp has the lowest correlation with gold over the past year, while Royal Gold has the highest correlation.
Only Goldcorp has seen an upward-moving trend in its correlation with gold over the past three years, while the other three stocks above have seen mixed trends in correlation.
Goldcorp has a three-year correlation of 0.48 and a one-year correlation of 0.62. A correlation of 0.62 means that about 62.0% of the time during the past year, Goldcorp has moved in the same direction as gold.