Correlation Between Agnico Eagle and NV Gold
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and NV 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 NV 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 NV Gold, you can compare the effects of market volatilities on Agnico Eagle and NV 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 NV Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and NV Gold.
Diversification Opportunities for Agnico Eagle and NV Gold
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Agnico and NVGLF is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and NV Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NV 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 NV Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NV Gold has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and NV Gold go up and down completely randomly.
Pair Corralation between Agnico Eagle and NV Gold
Considering the 90-day investment horizon Agnico Eagle Mines is expected to generate 0.26 times more return on investment than NV Gold. However, Agnico Eagle Mines is 3.92 times less risky than NV Gold. It trades about 0.2 of its potential returns per unit of risk. NV Gold is currently generating about -0.15 per unit of risk. If you would invest 7,776 in Agnico Eagle Mines on September 12, 2024 and sell it today you would earn a total of 655.00 from holding Agnico Eagle Mines or generate 8.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agnico Eagle Mines vs. NV Gold
Performance |
| Timeline |
| Agnico Eagle Mines |
| NV Gold |
Agnico Eagle and NV Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agnico Eagle and NV Gold
The main advantage of trading using opposite Agnico Eagle and NV Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, NV 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 NV Gold will offset losses from the drop in NV Gold's long position.| Agnico Eagle vs. Franco Nevada | Agnico Eagle vs. Royal Gold | Agnico Eagle vs. Alamos Gold | Agnico Eagle vs. Seabridge Gold |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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