Correlation Between Gold Reserve and Agnico Eagle
Can any of the company-specific risk be diversified away by investing in both Gold Reserve 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 Gold Reserve and Agnico Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Reserve and Agnico Eagle Mines, you can compare the effects of market volatilities on Gold Reserve 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 Gold Reserve with a short position of Agnico Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Reserve and Agnico Eagle.
Diversification Opportunities for Gold Reserve and Agnico Eagle
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gold and Agnico is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Gold Reserve 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 Gold Reserve 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 Gold Reserve 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 Gold Reserve i.e., Gold Reserve and Agnico Eagle go up and down completely randomly.
Pair Corralation between Gold Reserve and Agnico Eagle
Assuming the 90 days horizon Gold Reserve is expected to under-perform the Agnico Eagle. But the otc stock apears to be less risky and, when comparing its historical volatility, Gold Reserve is 1.04 times less risky than Agnico Eagle. The otc stock trades about -0.04 of its potential returns per unit of risk. The Agnico Eagle Mines is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 5,592 in Agnico Eagle Mines on January 20, 2024 and sell it today you would earn a total of 792.00 from holding Agnico Eagle Mines or generate 14.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Reserve vs. Agnico Eagle Mines
Performance |
| Timeline |
| Gold Reserve |
| Agnico Eagle Mines |
Gold Reserve and Agnico Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Reserve and Agnico Eagle
The main advantage of trading using opposite Gold Reserve and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Reserve 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.| Gold Reserve vs. Alumina Limited | Gold Reserve vs. HUMANA INC | Gold Reserve vs. Aquagold International | Gold Reserve vs. Spring Valley Acquisition |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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