Correlation Between Agnico Eagle and Kinross Gold
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and Kinross 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 Kinross 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 Kinross Gold, you can compare the effects of market volatilities on Agnico Eagle and Kinross 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 Kinross Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and Kinross Gold.
Diversification Opportunities for Agnico Eagle and Kinross Gold
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agnico and Kinross is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and Kinross Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinross Gold 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 Kinross Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinross Gold has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and Kinross Gold go up and down completely randomly.
Pair Corralation between Agnico Eagle and Kinross Gold
Considering the 90-day investment horizon Agnico Eagle Mines is expected to generate 0.69 times more return on investment than Kinross Gold. However, Agnico Eagle Mines is 1.45 times less risky than Kinross Gold. It trades about -0.09 of its potential returns per unit of risk. Kinross Gold is currently generating about -0.06 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. Kinross Gold
Performance |
| Timeline |
| Agnico Eagle Mines |
| Kinross Gold |
Agnico Eagle and Kinross Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agnico Eagle and Kinross Gold
The main advantage of trading using opposite Agnico Eagle and Kinross Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, Kinross 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 Kinross Gold will offset losses from the drop in Kinross 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 |
| Kinross Gold vs. Pan American Silver | Kinross Gold vs. Newmont Goldcorp Corp | Kinross Gold vs. Wheaton Precious Metals | Kinross Gold vs. Franco Nevada |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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