Correlation Between Agnico Eagle and B2Gold Corp
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and B2Gold Corp 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 B2Gold Corp 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 B2Gold Corp, you can compare the effects of market volatilities on Agnico Eagle and B2Gold Corp 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 B2Gold Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and B2Gold Corp.
Diversification Opportunities for Agnico Eagle and B2Gold Corp
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agnico and B2Gold is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and B2Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B2Gold 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 B2Gold Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B2Gold Corp has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and B2Gold Corp go up and down completely randomly.
Pair Corralation between Agnico Eagle and B2Gold Corp
Considering the 90-day investment horizon Agnico Eagle Mines is expected to generate 1.05 times more return on investment than B2Gold Corp. However, Agnico Eagle is 1.05 times more volatile than B2Gold Corp. It trades about -0.09 of its potential returns per unit of risk. B2Gold Corp is currently generating about -0.37 per unit of risk. If you would invest 8,799 in Agnico Eagle Mines on August 23, 2024 and sell it today you would lose (442.00) from holding Agnico Eagle Mines or give up 5.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agnico Eagle Mines vs. B2Gold Corp
Performance |
| Timeline |
| Agnico Eagle Mines |
| B2Gold Corp |
Agnico Eagle and B2Gold Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agnico Eagle and B2Gold Corp
The main advantage of trading using opposite Agnico Eagle and B2Gold Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, B2Gold Corp 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 B2Gold Corp will offset losses from the drop in B2Gold Corp's long position.| Agnico Eagle vs. Wheaton Precious Metals | Agnico Eagle vs. Newmont Goldcorp Corp | Agnico Eagle vs. Kinross Gold | Agnico Eagle vs. Gold Fields Ltd |
| B2Gold Corp vs. Sandstorm Gold Ltd | B2Gold Corp vs. Kinross Gold | B2Gold Corp vs. Alamos Gold | B2Gold Corp vs. Fortuna Silver Mines |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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