Correlation Between GoldMining and Agnico Eagle
Can any of the company-specific risk be diversified away by investing in both GoldMining 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 GoldMining and Agnico Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoldMining and Agnico Eagle Mines, you can compare the effects of market volatilities on GoldMining 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 GoldMining with a short position of Agnico Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoldMining and Agnico Eagle.
Diversification Opportunities for GoldMining and Agnico Eagle
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between GoldMining and Agnico is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining 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 GoldMining 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 GoldMining 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 GoldMining i.e., GoldMining and Agnico Eagle go up and down completely randomly.
Pair Corralation between GoldMining and Agnico Eagle
Given the investment horizon of 90 days GoldMining is expected to under-perform the Agnico Eagle. In addition to that, GoldMining is 1.51 times more volatile than Agnico Eagle Mines. It trades about -0.02 of its total potential returns per unit of risk. Agnico Eagle Mines is currently generating about 0.07 per unit of volatility. If you would invest 4,836 in Agnico Eagle Mines on August 30, 2024 and sell it today you would earn a total of 3,519 from holding Agnico Eagle Mines or generate 72.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GoldMining vs. Agnico Eagle Mines
Performance |
| Timeline |
| GoldMining |
| Agnico Eagle Mines |
GoldMining and Agnico Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoldMining and Agnico Eagle
The main advantage of trading using opposite GoldMining and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining 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.| GoldMining vs. Gold Royalty Corp | GoldMining vs. Uranium Royalty Corp | GoldMining vs. Metalla Royalty Streaming | GoldMining vs. Equinox Gold Corp |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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