In this final part of our series, we’ll analyze the relationships that some miners have with the precious metals they mine. This kind of correlation analysis can give us an idea about mining stock price movements and help us see how closely certain stocks are tied to the changes in precious metal prices.
Notably, the Global X Silver Miners (SIL) and the Vaneck Vectors Junior Gold Miners (GDXJ) have seen losses of 6% and 6.5%, respectively, over the last 30 trading days. These funds are closely tied to precious metals, similar to mining stocks.
B2Gold and Royal Gold have seen downward-trending correlations with gold, while Franco-Nevada and Randgold have seen mixed correlation trends. A dropping correlation suggests that companies are decreasingly less dependent on gold for their directional moves.
Royal Gold has seen its three-year correlation of ~0.75 with gold drop to a year-to-date correlation of ~0.72. A correlation of 0.72 year-to-date suggests the stock has moved in the same direction as gold ~72% of the time since the beginning of the year.