What’s the Directional Trend in Key Miners’ Correlation?

AngloGold Ashanti has had the lowest correlation with gold this year, while Gold Fields has had the highest correlation with gold.

Meera Shawn - Author
By

Nov. 10 2017, Updated 9:03 a.m. ET

uploads///CORRELATION

Correlation analysis

Most of the time, mining stocks’ performances follow precious metals. However, they can deviate. Correlation analysis can give investors some perspective on how mining stocks relate to gold and silver. In this part, we’ll compare Sibanye Gold (SBGL), Gold Fields (GFI), Barrick Gold (ABX), and AngloGold Ashanti (AU).

Mining funds like the Sprott Gold Miners (SGDM) and the Global X Silver Miners ETF (SIL) also track precious metals. They fell 0.15% and 1.4%, respectively, on a 30-day trailing basis.

Article continues below advertisement
Article continues below advertisement

Correlation trends

Among the four miners we’re examining, AngloGold Ashanti has had the lowest correlation with gold this year, while Gold Fields has had the highest correlation with gold.

All four mining stocks have seen their correlations with gold rise in the past three years.

Gold Fields and AngloGold’s correlation have risen in the past three years. AngloGold’s correlation rose from a three-year correlation of 0.49 to a one-year correlation of 0.66. A correlation of 0.66 suggests that AngloGold has moved in the same direction as gold ~66% of the time during the past year.

Barrick Gold has witnessed a drop in its correlation to gold during the last three years. Barrick Gold’s correlation fell from a three-year correlation of 0.56 to a one-year correlation of 0.52.

A correlation analysis is crucial because it can help us determine whether the stock may or may not be influenced by the changes in gold.

Advertisement

Latest Barrick Gold Corp News and Updates

    Opt-out of personalized ads

    © Copyright 2024 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.