Correlation Between Agnico Eagle and Gold Fields
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and Gold Fields 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 Gold Fields 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 Gold Fields Ltd, you can compare the effects of market volatilities on Agnico Eagle and Gold Fields 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 Gold Fields. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and Gold Fields.
Diversification Opportunities for Agnico Eagle and Gold Fields
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agnico and Gold is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and Gold Fields Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Fields 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 Gold Fields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Fields has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and Gold Fields go up and down completely randomly.
Pair Corralation between Agnico Eagle and Gold Fields
Considering the 90-day investment horizon Agnico Eagle Mines is expected to generate 0.78 times more return on investment than Gold Fields. However, Agnico Eagle Mines is 1.29 times less risky than Gold Fields. It trades about -0.09 of its potential returns per unit of risk. Gold Fields Ltd is currently generating about -0.31 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. Gold Fields Ltd
Performance |
| Timeline |
| Agnico Eagle Mines |
| Gold Fields |
Agnico Eagle and Gold Fields Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agnico Eagle and Gold Fields
The main advantage of trading using opposite Agnico Eagle and Gold Fields positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, Gold Fields 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 Gold Fields will offset losses from the drop in Gold Fields' 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 |
| Gold Fields vs. Agnico Eagle Mines | Gold Fields vs. Pan American Silver | Gold Fields vs. Kinross Gold | Gold Fields 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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