Correlation Between Agnico Eagle and Derwent London
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and Derwent London 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 Derwent London 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 Derwent London PLC, you can compare the effects of market volatilities on Agnico Eagle and Derwent London 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 Derwent London. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and Derwent London.
Diversification Opportunities for Agnico Eagle and Derwent London
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Agnico and Derwent is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and Derwent London PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Derwent London PLC 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 Derwent London. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Derwent London PLC has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and Derwent London go up and down completely randomly.
Pair Corralation between Agnico Eagle and Derwent London
Considering the 90-day investment horizon Agnico Eagle Mines is expected to generate 0.73 times more return on investment than Derwent London. However, Agnico Eagle Mines is 1.37 times less risky than Derwent London. It trades about 0.3 of its potential returns per unit of risk. Derwent London PLC is currently generating about -0.22 per unit of risk. If you would invest 7,736 in Agnico Eagle Mines on October 20, 2024 and sell it today you would earn a total of 767.00 from holding Agnico Eagle Mines or generate 9.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agnico Eagle Mines vs. Derwent London PLC
Performance |
| Timeline |
| Agnico Eagle Mines |
| Derwent London PLC |
Agnico Eagle and Derwent London Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agnico Eagle and Derwent London
The main advantage of trading using opposite Agnico Eagle and Derwent London positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, Derwent London 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 Derwent London will offset losses from the drop in Derwent London'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 |
| Derwent London vs. Willamette Valley Vineyards | Derwent London vs. Pinterest | Derwent London vs. Ambev SA ADR | Derwent London vs. Monster Beverage Corp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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