Correlation Between Agnico Eagle and IAMGold
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and IAMGold 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 IAMGold 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 IAMGold, you can compare the effects of market volatilities on Agnico Eagle and IAMGold 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 IAMGold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and IAMGold.
Diversification Opportunities for Agnico Eagle and IAMGold
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Agnico and IAMGold is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and IAMGold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IAMGold 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 IAMGold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IAMGold has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and IAMGold go up and down completely randomly.
Pair Corralation between Agnico Eagle and IAMGold
Assuming the 90 days trading horizon Agnico Eagle Mines is expected to under-perform the IAMGold. But the stock apears to be less risky and, when comparing its historical volatility, Agnico Eagle Mines is 1.53 times less risky than IAMGold. The stock trades about -0.1 of its potential returns per unit of risk. The IAMGold is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 784.00 in IAMGold on August 28, 2024 and sell it today you would lose (36.00) from holding IAMGold or give up 4.59% 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. IAMGold
Performance |
| Timeline |
| Agnico Eagle Mines |
| IAMGold |
Agnico Eagle and IAMGold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agnico Eagle and IAMGold
The main advantage of trading using opposite Agnico Eagle and IAMGold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, IAMGold 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 IAMGold will offset losses from the drop in IAMGold'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 |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |