Correlation Between Agnico Eagle and Nabors Energy
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and Nabors Energy 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 Nabors Energy 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 Nabors Energy Transition, you can compare the effects of market volatilities on Agnico Eagle and Nabors Energy 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 Nabors Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and Nabors Energy.
Diversification Opportunities for Agnico Eagle and Nabors Energy
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Agnico and Nabors is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and Nabors Energy Transition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nabors Energy Transition 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 Nabors Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nabors Energy Transition has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and Nabors Energy go up and down completely randomly.
Pair Corralation between Agnico Eagle and Nabors Energy
Considering the 90-day investment horizon Agnico Eagle is expected to generate 6.92 times less return on investment than Nabors Energy. But when comparing it to its historical volatility, Agnico Eagle Mines is 6.15 times less risky than Nabors Energy. It trades about 0.23 of its potential returns per unit of risk. Nabors Energy Transition is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Nabors Energy Transition on September 14, 2024 and sell it today you would earn a total of 6.03 from holding Nabors Energy Transition or generate 60.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 86.36% |
| Values | Daily Returns |
Agnico Eagle Mines vs. Nabors Energy Transition
Performance |
| Timeline |
| Agnico Eagle Mines |
| Nabors Energy Transition |
Agnico Eagle and Nabors Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agnico Eagle and Nabors Energy
The main advantage of trading using opposite Agnico Eagle and Nabors Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, Nabors Energy 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 Nabors Energy will offset losses from the drop in Nabors Energy's long position.| Agnico Eagle vs. Fortitude Gold Corp | Agnico Eagle vs. New Gold | Agnico Eagle vs. Galiano Gold | Agnico Eagle vs. GoldMining |
| Nabors Energy vs. Agnico Eagle Mines | Nabors Energy vs. Allegheny Technologies Incorporated | Nabors Energy vs. BJs Restaurants | Nabors Energy vs. Osaka Steel Co, |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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