Correlation Between Equinox Gold and Agnico Eagle
Can any of the company-specific risk be diversified away by investing in both Equinox 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 Equinox 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 Equinox Gold Corp and Agnico Eagle Mines, you can compare the effects of market volatilities on Equinox 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 Equinox Gold with a short position of Agnico Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinox Gold and Agnico Eagle.
Diversification Opportunities for Equinox Gold and Agnico Eagle
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Equinox and Agnico is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Equinox Gold Corp 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 Equinox 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 Equinox Gold Corp 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 Equinox Gold i.e., Equinox Gold and Agnico Eagle go up and down completely randomly.
Pair Corralation between Equinox Gold and Agnico Eagle
Assuming the 90 days trading horizon Equinox Gold is expected to generate 1.61 times less return on investment than Agnico Eagle. In addition to that, Equinox Gold is 1.76 times more volatile than Agnico Eagle Mines. It trades about 0.06 of its total potential returns per unit of risk. Agnico Eagle Mines is currently generating about 0.16 per unit of volatility. If you would invest 8,714 in Agnico Eagle Mines on September 5, 2024 and sell it today you would earn a total of 3,387 from holding Agnico Eagle Mines or generate 38.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equinox Gold Corp vs. Agnico Eagle Mines
Performance |
| Timeline |
| Equinox Gold Corp |
| Agnico Eagle Mines |
Equinox Gold and Agnico Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinox Gold and Agnico Eagle
The main advantage of trading using opposite Equinox Gold and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinox 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.| Equinox Gold vs. Sandstorm Gold Ltd | Equinox Gold vs. Pan American Silver | Equinox Gold vs. SSR Mining | Equinox Gold vs. SilverCrest Metals |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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