Is Kinross Gold Stock a good bet after dropping 16% in six months?
Kinross Gold Corp Shares (NYSE: KGC) has fallen 16% in the past six months (126 trading days) and is currently trading at just over $ 7 per share. The decline in stock prices was mainly due to low gold prices. After rising sharply from $ 1,500 / ounce in January 2020 to over $ 2,000 / ounce in September 2020, gold prices have since remained volatile and have, in fact, fallen significantly. The weakness in the price of gold was due to the gradual lifting of lockdowns, which led to expectations of a faster economic recovery. In addition, the successful deployment of vaccines has led to an overall positive sentiment in the market, in turn affecting the prices of precious metals. The price of gold currently stands at $ 1,780 / ounce, falling more than 10% from its high in September 2020. The recent drop in gold prices has had a negative impact on stocks of Kinross Gold because the company derives almost all of its revenue from the yellow metal. But will Kinross Gold stock continue its downward trajectory over the next few weeks, or is a rally more likely?
According to the Trefis Machine Learning Engine, which identifies trends in a company’s stock price data over the past ten years, KGC stock returns average close to 7.6% then six months (126 trading days) period after experiencing a 16% drop in the previous six months (126 trading days). Notably, however, the stock is likely to surpass the S & P500 over the next six months, with an expected return that would be almost 3% higher than that of the S & P500.
But how would those numbers change if you wanted to hold KGC shares for a longer or shorter period? You can test the answer and many other combinations on the Trefis Machine learning to test the chances of KGC shares rising after a fall and vice versa. You can test the chances of recovery over different time intervals of a quarter, a month, or even a single day!
MACHINE LEARNING MOTOR – try it yourself:
IF The KGC share has moved by -5% over five trading days, SO Over the next 21 trading days, the KGC share moves an average of 3.3%, implying a return 2.3% higher than that of the S & P500.
More importantly, there is a 52% chance that a positive return over the next 21 trading days and a 47% probability of a positive excess return after a variation of -5% over five trading days.
Some fun scenarios, FAQs and explanation of KGC stock movements:
Question 1: Is the average return on Kinross Gold stock higher after going down?
Consider two situations,
Case 1: Kinross Gold shares fall -5% or more in a week
Case 2: Kinross Gold share increases 5% or more in a week
Is the average return on Kinross Gold shares higher in the next month after Case 1 or Case 2?
KGC share fares better after case 1, with an average yield of 3.3% during the following month (21 trading days) in case 1 (where the stock has just suffered a loss of 5% during the previous week), against an average return of 1.7% for case 2.
In comparison, the S&P 500 has an average return of 3.1% over the next 21 trading days in case 1, and an average return of only 0.5% for case 2, as detailed in our dashboard. which details the average return of the S&P 500 after a fall or rise.
Try the Trefis machine learning engine above to see for yourself how the Kinross Gold stock is likely to behave after a specific gain or loss over a period of time.
Question 2: Does patience pay?
If you buy and hold shares in Kinross Gold, it is expected that over time short-term fluctuations will cancel each other out and the long-term positive trend will be in your favor, at least if the company is through. elsewhere solid.
All in all, according to data and calculations from the machine learning engine Trefis, patience absolutely pays for most actions!
Question 3: What about the average return after a rise if you wait a while?
The average return after a rise is generally lower than after a fall as detailed in the previous question. Interestingly, however, if a stock has won in the last few days, you’d better avoid short-term bets for most stocks.
It is powerful enough to test the trend for yourself for the Kinross Gold stock by changing the entries in the charts above.
The recent spike in Covid cases in major economies has raised concerns that the second wave is worse than the first. This has led to some recent dollar weakness, with investors believing that the reimposition of lockdowns will delay economic recovery. In addition, lax monetary policy in major economies is expected to continue, which would keep interest rates moderate, making the yellow metal more lucrative. This led to a rise in world gold prices, which rose from less than $ 1,690 / ounce in early April 2021 to $ 1,780 / ounce on April 27, 2021. Gold prices are expected to remain high over the years. next few months, KGC stock has the potential to see a near-term double-digit increase.
While Kinross Gold shares may have moved, 2020 has created a lot of price discontinuities that may provide some exciting trading opportunities. For example, you will be surprised at how the valuation of stocks for Compass Minerals vs Southwest Gas
shows a disconnect with their relative operational growth. You can find a lot of these discontinuous pairs here.
See everything Trefis price estimates and To download Trefis data here
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