Correlation Between Agnico Eagle and Wheaton Precious
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and Wheaton Precious 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 Wheaton Precious 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 Wheaton Precious Metals, you can compare the effects of market volatilities on Agnico Eagle and Wheaton Precious 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 Wheaton Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and Wheaton Precious.
Diversification Opportunities for Agnico Eagle and Wheaton Precious
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Agnico and Wheaton is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and Wheaton Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wheaton Precious Metals 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 Wheaton Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wheaton Precious Metals has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and Wheaton Precious go up and down completely randomly.
Pair Corralation between Agnico Eagle and Wheaton Precious
Considering the 90-day investment horizon Agnico Eagle Mines is expected to generate 1.08 times more return on investment than Wheaton Precious. However, Agnico Eagle is 1.08 times more volatile than Wheaton Precious Metals. It trades about 0.42 of its potential returns per unit of risk. Wheaton Precious Metals is currently generating about 0.23 per unit of risk. If you would invest 7,821 in Agnico Eagle Mines on November 1, 2024 and sell it today you would earn a total of 1,190 from holding Agnico Eagle Mines or generate 15.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agnico Eagle Mines vs. Wheaton Precious Metals
Performance |
| Timeline |
| Agnico Eagle Mines |
| Wheaton Precious Metals |
Agnico Eagle and Wheaton Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agnico Eagle and Wheaton Precious
The main advantage of trading using opposite Agnico Eagle and Wheaton Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, Wheaton Precious 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 Wheaton Precious will offset losses from the drop in Wheaton Precious' 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 |
| Wheaton Precious vs. Agnico Eagle Mines | Wheaton Precious vs. Pan American Silver | Wheaton Precious vs. Kinross Gold | Wheaton Precious vs. Newmont Goldcorp 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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