Correlation Between Agnico Eagle and Alamos Gold
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and Alamos Gold 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 Alamos Gold 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 Alamos Gold, you can compare the effects of market volatilities on Agnico Eagle and Alamos Gold 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 Alamos Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and Alamos Gold.
Diversification Opportunities for Agnico Eagle and Alamos Gold
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Agnico and Alamos is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and Alamos Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alamos Gold 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 Alamos Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alamos Gold has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and Alamos Gold go up and down completely randomly.
Pair Corralation between Agnico Eagle and Alamos Gold
Assuming the 90 days trading horizon Agnico Eagle Mines is expected to generate 1.06 times more return on investment than Alamos Gold. However, Agnico Eagle is 1.06 times more volatile than Alamos Gold. It trades about -0.1 of its potential returns per unit of risk. Alamos Gold is currently generating about -0.22 per unit of risk. If you would invest 12,052 in Agnico Eagle Mines on August 28, 2024 and sell it today you would lose (626.00) from holding Agnico Eagle Mines or give up 5.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agnico Eagle Mines vs. Alamos Gold
Performance |
| Timeline |
| Agnico Eagle Mines |
| Alamos Gold |
Agnico Eagle and Alamos Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agnico Eagle and Alamos Gold
The main advantage of trading using opposite Agnico Eagle and Alamos Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, Alamos Gold 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 Alamos Gold will offset losses from the drop in Alamos Gold's long position.| Agnico Eagle vs. Franco Nevada | Agnico Eagle vs. Kinross Gold Corp | Agnico Eagle vs. Barrick Gold Corp | Agnico Eagle vs. Wheaton Precious Metals |
| Alamos Gold vs. First Majestic Silver | Alamos Gold vs. Ivanhoe Energy | Alamos Gold vs. Orezone Gold Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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