Correlation Between Agnico Eagle and Spring Valley
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and Spring Valley 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 Spring Valley 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 Spring Valley Acquisition, you can compare the effects of market volatilities on Agnico Eagle and Spring Valley 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 Spring Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and Spring Valley.
Diversification Opportunities for Agnico Eagle and Spring Valley
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Agnico and Spring is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and Spring Valley Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spring Valley Acquisition 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 Spring Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spring Valley Acquisition has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and Spring Valley go up and down completely randomly.
Pair Corralation between Agnico Eagle and Spring Valley
Considering the 90-day investment horizon Agnico Eagle is expected to generate 28.33 times less return on investment than Spring Valley. But when comparing it to its historical volatility, Agnico Eagle Mines is 43.62 times less risky than Spring Valley. It trades about 0.12 of its potential returns per unit of risk. Spring Valley Acquisition is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 9.45 in Spring Valley Acquisition on September 3, 2024 and sell it today you would lose (2.44) from holding Spring Valley Acquisition or give up 25.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 60.73% |
| Values | Daily Returns |
Agnico Eagle Mines vs. Spring Valley Acquisition
Performance |
| Timeline |
| Agnico Eagle Mines |
| Spring Valley Acquisition |
Agnico Eagle and Spring Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agnico Eagle and Spring Valley
The main advantage of trading using opposite Agnico Eagle and Spring Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, Spring Valley 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 Spring Valley will offset losses from the drop in Spring Valley'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 |
| Spring Valley vs. Assurant | Spring Valley vs. Mesa Air Group | Spring Valley vs. Proficient Auto Logistics, | Spring Valley vs. GoHealth |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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