Correlation Between Agnico Eagle and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and Harmony 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 Harmony 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 Harmony Gold Mining, you can compare the effects of market volatilities on Agnico Eagle and Harmony 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 Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and Harmony Gold.
Diversification Opportunities for Agnico Eagle and Harmony Gold
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Agnico and Harmony is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and Harmony Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmony Gold Mining 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 Harmony Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmony Gold Mining has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and Harmony Gold go up and down completely randomly.
Pair Corralation between Agnico Eagle and Harmony Gold
Considering the 90-day investment horizon Agnico Eagle Mines is expected to generate 0.7 times more return on investment than Harmony Gold. However, Agnico Eagle Mines is 1.42 times less risky than Harmony Gold. It trades about -0.14 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.23 per unit of risk. If you would invest 8,453 in Agnico Eagle Mines on October 9, 2024 and sell it today you would lose (487.00) from holding Agnico Eagle Mines or give up 5.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agnico Eagle Mines vs. Harmony Gold Mining
Performance |
| Timeline |
| Agnico Eagle Mines |
| Harmony Gold Mining |
Agnico Eagle and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agnico Eagle and Harmony Gold
The main advantage of trading using opposite Agnico Eagle and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, Harmony 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 Harmony Gold will offset losses from the drop in Harmony 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 |
| Harmony Gold vs. Kenon Holdings | Harmony Gold vs. Transportadora de Gas | Harmony Gold vs. CenterPoint Energy | Harmony Gold vs. Consol Energy |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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