The importance of distinguishing between precious and industrial metals when investing in mining stocks

Marco Lazzarino, Jenny Berrill and Aleksandar Šević

Resources Policy, 2022, vol. 78, issue C

Abstract: We investigate the sensitivity of world mining stocks to precious and industrial metals by adding a metal factor to the CAPM and Fama-French models. We find that metals are fundamental in explaining mining stocks' returns and more influential than Fama-French factors. We also find that metals are more significant for stocks of precious than industrial metals and the effect is stronger for firms domiciled in developed markets. The market factor is more relevant for stocks of industrial metals. Our results suggest that investors should treat mining stocks differently and need to distinguish between precious and industrial metals.

Keywords: Mining stocks; Metals; Factor models (search for similar items in EconPapers)
JEL-codes: G10 G11 G12 G14 G15 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:78:y:2022:i:c:s0301420722002501

DOI: 10.1016/j.resourpol.2022.102802

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