Correlation Between Alkane Resources and Agnico Eagle
Can any of the company-specific risk be diversified away by investing in both Alkane Resources and Agnico Eagle 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 Alkane Resources and Agnico Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alkane Resources Limited and Agnico Eagle Mines, you can compare the effects of market volatilities on Alkane Resources and Agnico Eagle 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 Alkane Resources with a short position of Agnico Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alkane Resources and Agnico Eagle.
Diversification Opportunities for Alkane Resources and Agnico Eagle
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alkane and Agnico is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Alkane Resources Limited and Agnico Eagle Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agnico Eagle Mines and Alkane Resources 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 Alkane Resources Limited are associated (or correlated) with Agnico Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agnico Eagle Mines has no effect on the direction of Alkane Resources i.e., Alkane Resources and Agnico Eagle go up and down completely randomly.
Pair Corralation between Alkane Resources and Agnico Eagle
Assuming the 90 days horizon Alkane Resources Limited is expected to generate 3.36 times more return on investment than Agnico Eagle. However, Alkane Resources is 3.36 times more volatile than Agnico Eagle Mines. It trades about 0.17 of its potential returns per unit of risk. Agnico Eagle Mines is currently generating about 0.55 per unit of risk. If you would invest 32.00 in Alkane Resources Limited on November 8, 2024 and sell it today you would earn a total of 6.00 from holding Alkane Resources Limited or generate 18.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Alkane Resources Limited vs. Agnico Eagle Mines
Performance |
| Timeline |
| Alkane Resources |
| Agnico Eagle Mines |
Alkane Resources and Agnico Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alkane Resources and Agnico Eagle
The main advantage of trading using opposite Alkane Resources and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alkane Resources position performs unexpectedly, Agnico Eagle 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 Agnico Eagle will offset losses from the drop in Agnico Eagle's long position.| Alkane Resources vs. Arafura Resources | Alkane Resources vs. Great Western Minerals | Alkane Resources vs. Greenland Minerals And | Alkane Resources vs. Ucore Rare Metals |
| Agnico Eagle vs. Wheaton Precious Metals | Agnico Eagle vs. Newmont Goldcorp Corp | Agnico Eagle vs. Kinross Gold | Agnico Eagle vs. Gold Fields Ltd |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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