Correlation Between Agnico Eagle and NeXGold Mining
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and NeXGold Mining 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 NeXGold Mining 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 NeXGold Mining Corp, you can compare the effects of market volatilities on Agnico Eagle and NeXGold Mining 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 NeXGold Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and NeXGold Mining.
Diversification Opportunities for Agnico Eagle and NeXGold Mining
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Agnico and NeXGold is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and NeXGold Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeXGold Mining 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 NeXGold Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeXGold Mining Corp has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and NeXGold Mining go up and down completely randomly.
Pair Corralation between Agnico Eagle and NeXGold Mining
Assuming the 90 days trading horizon Agnico Eagle Mines is expected to generate 0.81 times more return on investment than NeXGold Mining. However, Agnico Eagle Mines is 1.23 times less risky than NeXGold Mining. It trades about -0.1 of its potential returns per unit of risk. NeXGold Mining Corp is currently generating about -0.34 per unit of risk. If you would invest 12,052 in Agnico Eagle Mines on August 27, 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agnico Eagle Mines vs. NeXGold Mining Corp
Performance |
| Timeline |
| Agnico Eagle Mines |
| NeXGold Mining Corp |
Agnico Eagle and NeXGold Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agnico Eagle and NeXGold Mining
The main advantage of trading using opposite Agnico Eagle and NeXGold Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, NeXGold Mining 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 NeXGold Mining will offset losses from the drop in NeXGold Mining'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 |
| NeXGold Mining vs. Bip Investment Corp | NeXGold Mining vs. Economic Investment Trust | NeXGold Mining vs. Faction Investment Group | NeXGold Mining vs. Plaza Retail REIT |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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