Correlation Between Centerra Gold and Agnico Eagle
Can any of the company-specific risk be diversified away by investing in both Centerra Gold 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 Centerra Gold and Agnico Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centerra Gold and Agnico Eagle Mines, you can compare the effects of market volatilities on Centerra Gold 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 Centerra Gold with a short position of Agnico Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centerra Gold and Agnico Eagle.
Diversification Opportunities for Centerra Gold and Agnico Eagle
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Centerra and Agnico is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Centerra Gold 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 Centerra Gold 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 Centerra Gold 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 Centerra Gold i.e., Centerra Gold and Agnico Eagle go up and down completely randomly.
Pair Corralation between Centerra Gold and Agnico Eagle
Assuming the 90 days horizon Centerra Gold is expected to under-perform the Agnico Eagle. In addition to that, Centerra Gold is 1.13 times more volatile than Agnico Eagle Mines. It trades about -0.29 of its total potential returns per unit of risk. Agnico Eagle Mines is currently generating about -0.1 per unit of volatility. If you would invest 12,052 in Agnico Eagle Mines on August 28, 2024 and sell it today you would lose (626.00) from holding Agnico Eagle Mines or give up 5.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centerra Gold vs. Agnico Eagle Mines
Performance |
| Timeline |
| Centerra Gold |
| Agnico Eagle Mines |
Centerra Gold and Agnico Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centerra Gold and Agnico Eagle
The main advantage of trading using opposite Centerra Gold and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centerra Gold 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.| Centerra Gold vs. Alamos Gold | Centerra Gold vs. NovaGold Resources | Centerra Gold vs. Eldorado Gold Corp | Centerra Gold vs. IAMGold |
| Agnico Eagle vs. Franco Nevada | Agnico Eagle vs. Kinross Gold Corp | Agnico Eagle vs. Barrick Gold Corp | Agnico Eagle vs. Wheaton Precious Metals |
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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