Correlation Between Agnico Eagle and Equinox Gold
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and Equinox 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 Equinox 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 Equinox Gold Corp, you can compare the effects of market volatilities on Agnico Eagle and Equinox 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 Equinox Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and Equinox Gold.
Diversification Opportunities for Agnico Eagle and Equinox Gold
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Agnico and Equinox is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and Equinox Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinox Gold Corp 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 Equinox Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinox Gold Corp has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and Equinox Gold go up and down completely randomly.
Pair Corralation between Agnico Eagle and Equinox Gold
Assuming the 90 days trading horizon Agnico Eagle is expected to generate 1.2 times less return on investment than Equinox Gold. But when comparing it to its historical volatility, Agnico Eagle Mines is 1.85 times less risky than Equinox Gold. It trades about 0.08 of its potential returns per unit of risk. Equinox Gold Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 475.00 in Equinox Gold Corp on September 5, 2024 and sell it today you would earn a total of 350.00 from holding Equinox Gold Corp or generate 73.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agnico Eagle Mines vs. Equinox Gold Corp
Performance |
| Timeline |
| Agnico Eagle Mines |
| Equinox Gold Corp |
Agnico Eagle and Equinox Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agnico Eagle and Equinox Gold
The main advantage of trading using opposite Agnico Eagle and Equinox Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, Equinox 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 Equinox Gold will offset losses from the drop in Equinox 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 |
| Equinox Gold vs. Sandstorm Gold Ltd | Equinox Gold vs. Pan American Silver | Equinox Gold vs. SSR Mining | Equinox Gold vs. SilverCrest 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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