What future for Kinross Gold Stock after value erosion of more than 20%?
Kinross Gold Corp Shares (NYSE: KGC) has lost 21% of its value in the past month and is currently trading above $ 6 per share. The decline in the title is mainly due to the weakness of 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 a vaccine led to an overall positive sentiment in the market, in turn affecting the prices of precious metals. The price of gold currently stands at $ 1,764 / ounce, marking a decline of more than 12% from its peak in September 2020. The price of gold has also seen a decline of nearly 6% over the course of the year. month, due to an improving economic scenario and higher interest rate expectations in the coming months. The recent drop in gold prices has negatively impacted Kinross Gold shares as the company derives virtually all of its revenue from the yellow metal. But will KGC stock continue on 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 on average nearly 15% then one month (21 trading days) period after experiencing a 21% drop in the previous one-month period (21 trading days). 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%, with a 52% probability of a positive return over this period.
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 1.6% 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 of Kinross Gold, it is expected that over time short-term fluctuations will cancel each other out and the long-term positive trend will favor you – at least if the company is otherwise solid.
All in all, according to data and calculations from the machine learning engine Trefis, patience absolutely pays for most actions!
For the KGC share, returns over the following N days after a variation of -5% over the last 5 trading days is detailed in the table below, along with the returns of the S & P500:
Question 3: What about the average return after a rise if you wait a while?
The average return after a rise is naturally lower than that 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.
KGC’s feedback over the next N days after a 5% variation over the last 5 trading days is detailed in the table below, along with the returns of the S & P500:
It is powerful enough to test the trend for yourself for the Kinross Gold stock by changing the entries in the charts above.
While KGC stock may have moved, 2020 has created a lot of price discontinuities that may offer 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.
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