Correlation Between Agnico Eagle and Eldorado Gold
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and Eldorado Gold 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 Eldorado Gold 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 Eldorado Gold Corp, you can compare the effects of market volatilities on Agnico Eagle and Eldorado Gold 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 Eldorado Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and Eldorado Gold.
Diversification Opportunities for Agnico Eagle and Eldorado Gold
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agnico and Eldorado is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and Eldorado Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eldorado Gold 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 Eldorado Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eldorado Gold Corp has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and Eldorado Gold go up and down completely randomly.
Pair Corralation between Agnico Eagle and Eldorado Gold
Considering the 90-day investment horizon Agnico Eagle Mines is expected to generate 0.78 times more return on investment than Eldorado Gold. However, Agnico Eagle Mines is 1.28 times less risky than Eldorado Gold. It trades about 0.11 of its potential returns per unit of risk. Eldorado Gold Corp is currently generating about 0.05 per unit of risk. If you would invest 5,201 in Agnico Eagle Mines on August 24, 2024 and sell it today you would earn a total of 3,156 from holding Agnico Eagle Mines or generate 60.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agnico Eagle Mines vs. Eldorado Gold Corp
Performance |
| Timeline |
| Agnico Eagle Mines |
| Eldorado Gold Corp |
Agnico Eagle and Eldorado Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agnico Eagle and Eldorado Gold
The main advantage of trading using opposite Agnico Eagle and Eldorado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, Eldorado Gold 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 Eldorado Gold will offset losses from the drop in Eldorado Gold'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 |
| Eldorado Gold vs. Agnico Eagle Mines | Eldorado Gold vs. Pan American Silver | Eldorado Gold vs. Kinross Gold | Eldorado Gold vs. B2Gold 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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