Correlation Between Agnico Eagle and Newmont
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and Newmont 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 Agnico Eagle and Newmont into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agnico Eagle Mines and Newmont, you can compare the effects of market volatilities on Agnico Eagle and Newmont 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 Agnico Eagle with a short position of Newmont. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and Newmont.
Diversification Opportunities for Agnico Eagle and Newmont
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Agnico and Newmont is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and Newmont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont and Agnico Eagle 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 Agnico Eagle Mines are associated (or correlated) with Newmont. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmont has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and Newmont go up and down completely randomly.
Pair Corralation between Agnico Eagle and Newmont
Assuming the 90 days horizon Agnico Eagle Mines is expected to generate 0.73 times more return on investment than Newmont. However, Agnico Eagle Mines is 1.38 times less risky than Newmont. It trades about 0.1 of its potential returns per unit of risk. Newmont is currently generating about 0.01 per unit of risk. If you would invest 4,832 in Agnico Eagle Mines on September 24, 2024 and sell it today you would earn a total of 2,732 from holding Agnico Eagle Mines or generate 56.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agnico Eagle Mines vs. Newmont
Performance |
| Timeline |
| Agnico Eagle Mines |
| Newmont |
Agnico Eagle and Newmont Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agnico Eagle and Newmont
The main advantage of trading using opposite Agnico Eagle and Newmont positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, Newmont 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 Newmont will offset losses from the drop in Newmont's long position.| Agnico Eagle vs. ZIJIN MINH UNSPADR20 | Agnico Eagle vs. Newmont | Agnico Eagle vs. Barrick Gold | Agnico Eagle vs. Franco Nevada |
| Newmont vs. ZIJIN MINH UNSPADR20 | Newmont vs. Barrick Gold | Newmont vs. Franco Nevada | Newmont vs. Agnico Eagle Mines |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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