Correlation Between Agnico Eagle and AKITA Drilling
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and AKITA Drilling 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 AKITA Drilling 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 AKITA Drilling, you can compare the effects of market volatilities on Agnico Eagle and AKITA Drilling 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 AKITA Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and AKITA Drilling.
Diversification Opportunities for Agnico Eagle and AKITA Drilling
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Agnico and AKITA is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and AKITA Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKITA Drilling 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 AKITA Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKITA Drilling has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and AKITA Drilling go up and down completely randomly.
Pair Corralation between Agnico Eagle and AKITA Drilling
Considering the 90-day investment horizon Agnico Eagle Mines is expected to generate 1.59 times more return on investment than AKITA Drilling. However, Agnico Eagle is 1.59 times more volatile than AKITA Drilling. It trades about 0.23 of its potential returns per unit of risk. AKITA Drilling is currently generating about 0.01 per unit of risk. If you would invest 7,678 in Agnico Eagle Mines on September 13, 2024 and sell it today you would earn a total of 843.00 from holding Agnico Eagle Mines or generate 10.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Agnico Eagle Mines vs. AKITA Drilling
Performance |
| Timeline |
| Agnico Eagle Mines |
| AKITA Drilling |
Agnico Eagle and AKITA Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agnico Eagle and AKITA Drilling
The main advantage of trading using opposite Agnico Eagle and AKITA Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, AKITA Drilling 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 AKITA Drilling will offset losses from the drop in AKITA Drilling's long position.| Agnico Eagle vs. Fortitude Gold Corp | Agnico Eagle vs. New Gold | Agnico Eagle vs. Galiano Gold | Agnico Eagle vs. GoldMining |
| AKITA Drilling vs. Cathedral Energy Services | AKITA Drilling vs. Vantage Drilling International | AKITA Drilling vs. Seadrill Limited | AKITA Drilling vs. Noble plc |
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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