Correlation Between Ivanhoe Mines and Agnico Eagle
Can any of the company-specific risk be diversified away by investing in both Ivanhoe Mines 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 Ivanhoe Mines and Agnico Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivanhoe Mines and Agnico Eagle Mines, you can compare the effects of market volatilities on Ivanhoe Mines 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 Ivanhoe Mines with a short position of Agnico Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivanhoe Mines and Agnico Eagle.
Diversification Opportunities for Ivanhoe Mines and Agnico Eagle
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ivanhoe and Agnico is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Mines 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 Ivanhoe Mines 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 Ivanhoe Mines 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 Ivanhoe Mines i.e., Ivanhoe Mines and Agnico Eagle go up and down completely randomly.
Pair Corralation between Ivanhoe Mines and Agnico Eagle
Assuming the 90 days trading horizon Ivanhoe Mines is expected to generate 1.4 times more return on investment than Agnico Eagle. However, Ivanhoe Mines is 1.4 times more volatile than Agnico Eagle Mines. It trades about 0.0 of its potential returns per unit of risk. Agnico Eagle Mines is currently generating about -0.06 per unit of risk. If you would invest 1,933 in Ivanhoe Mines on August 25, 2024 and sell it today you would lose (24.00) from holding Ivanhoe Mines or give up 1.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ivanhoe Mines vs. Agnico Eagle Mines
Performance |
| Timeline |
| Ivanhoe Mines |
| Agnico Eagle Mines |
Ivanhoe Mines and Agnico Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ivanhoe Mines and Agnico Eagle
The main advantage of trading using opposite Ivanhoe Mines and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Mines 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.| Ivanhoe Mines vs. Lundin Mining | Ivanhoe Mines vs. First Quantum Minerals | Ivanhoe Mines vs. HudBay Minerals | Ivanhoe Mines vs. Eldorado Gold Corp |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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