Correlation Between Nabors Energy and Agnico Eagle
Can any of the company-specific risk be diversified away by investing in both Nabors Energy 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 Nabors Energy and Agnico Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nabors Energy Transition and Agnico Eagle Mines, you can compare the effects of market volatilities on Nabors Energy 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 Nabors Energy with a short position of Agnico Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nabors Energy and Agnico Eagle.
Diversification Opportunities for Nabors Energy and Agnico Eagle
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nabors and Agnico is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Nabors Energy Transition 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 Nabors Energy 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 Nabors Energy Transition 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 Nabors Energy i.e., Nabors Energy and Agnico Eagle go up and down completely randomly.
Pair Corralation between Nabors Energy and Agnico Eagle
Assuming the 90 days horizon Nabors Energy Transition is expected to generate 6.34 times more return on investment than Agnico Eagle. However, Nabors Energy is 6.34 times more volatile than Agnico Eagle Mines. It trades about 0.26 of its potential returns per unit of risk. Agnico Eagle Mines is currently generating about 0.28 per unit of risk. If you would invest 10.00 in Nabors Energy Transition on September 14, 2024 and sell it today you would earn a total of 6.00 from holding Nabors Energy Transition or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
Nabors Energy Transition vs. Agnico Eagle Mines
Performance |
| Timeline |
| Nabors Energy Transition |
| Agnico Eagle Mines |
Nabors Energy and Agnico Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nabors Energy and Agnico Eagle
The main advantage of trading using opposite Nabors Energy and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nabors Energy 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.| Nabors Energy vs. Agnico Eagle Mines | Nabors Energy vs. Allegheny Technologies Incorporated | Nabors Energy vs. BJs Restaurants | Nabors Energy vs. Osaka Steel Co, |
| Agnico Eagle vs. Fortitude Gold Corp | Agnico Eagle vs. New Gold | Agnico Eagle vs. Galiano Gold | Agnico Eagle vs. GoldMining |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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