Correlation Between Agnico Eagle and Seabridge Gold
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and Seabridge 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 Seabridge 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 Seabridge Gold, you can compare the effects of market volatilities on Agnico Eagle and Seabridge 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 Seabridge Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and Seabridge Gold.
Diversification Opportunities for Agnico Eagle and Seabridge Gold
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agnico and Seabridge is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and Seabridge Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seabridge 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 Seabridge Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seabridge Gold has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and Seabridge Gold go up and down completely randomly.
Pair Corralation between Agnico Eagle and Seabridge Gold
Considering the 90-day investment horizon Agnico Eagle Mines is expected to generate 0.65 times more return on investment than Seabridge Gold. However, Agnico Eagle Mines is 1.54 times less risky than Seabridge Gold. It trades about 0.07 of its potential returns per unit of risk. Seabridge Gold is currently generating about 0.03 per unit of risk. If you would invest 4,782 in Agnico Eagle Mines on August 24, 2024 and sell it today you would earn a total of 3,575 from holding Agnico Eagle Mines or generate 74.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agnico Eagle Mines vs. Seabridge Gold
Performance |
| Timeline |
| Agnico Eagle Mines |
| Seabridge Gold |
Agnico Eagle and Seabridge Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agnico Eagle and Seabridge Gold
The main advantage of trading using opposite Agnico Eagle and Seabridge Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, Seabridge 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 Seabridge Gold will offset losses from the drop in Seabridge 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 |
| Seabridge Gold vs. Agnico Eagle Mines | Seabridge Gold vs. Pan American Silver | Seabridge Gold vs. Kinross Gold | Seabridge Gold 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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