Correlation Between Barrick Gold and Agnico Eagle
Can any of the company-specific risk be diversified away by investing in both Barrick Gold and Agnico Eagle at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Barrick Gold and Agnico Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barrick Gold Corp and Agnico Eagle Mines, you can compare the effects of market volatilities on Barrick Gold and Agnico Eagle and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Barrick Gold with a short position of Agnico Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrick Gold and Agnico Eagle.
Diversification Opportunities for Barrick Gold and Agnico Eagle
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Barrick and Agnico is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Barrick Gold Corp and Agnico Eagle Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agnico Eagle Mines and Barrick Gold is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Barrick Gold Corp are associated (or correlated) with Agnico Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agnico Eagle Mines has no effect on the direction of Barrick Gold i.e., Barrick Gold and Agnico Eagle go up and down completely randomly.
Pair Corralation between Barrick Gold and Agnico Eagle
Assuming the 90 days trading horizon Barrick Gold Corp is expected to under-perform the Agnico Eagle. But the stock apears to be less risky and, when comparing its historical volatility, Barrick Gold Corp is 1.08 times less risky than Agnico Eagle. The stock trades about -0.25 of its potential returns per unit of risk. The Agnico Eagle Mines is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 12,265 in Agnico Eagle Mines on August 24, 2024 and sell it today you would lose (589.00) from holding Agnico Eagle Mines or give up 4.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barrick Gold Corp vs. Agnico Eagle Mines
Performance |
| Timeline |
| Barrick Gold Corp |
| Agnico Eagle Mines |
Barrick Gold and Agnico Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrick Gold and Agnico Eagle
The main advantage of trading using opposite Barrick Gold and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrick Gold position performs unexpectedly, Agnico Eagle can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Agnico Eagle will offset losses from the drop in Agnico Eagle's long position.| Barrick Gold vs. Kinross Gold Corp | Barrick Gold vs. Agnico Eagle Mines | Barrick Gold vs. Suncor Energy | Barrick Gold vs. Canadian Natural Resources |
| Agnico Eagle vs. Franco Nevada | Agnico Eagle vs. Kinross Gold Corp | Agnico Eagle vs. Barrick Gold Corp | Agnico Eagle vs. Wheaton Precious Metals |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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