Correlation Between Kinross Gold and Agnico Eagle

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Can any of the company-specific risk be diversified away by investing in both Kinross 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 Kinross 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 Kinross Gold and Agnico Eagle Mines, you can compare the effects of market volatilities on Kinross 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 Kinross Gold with a short position of Agnico Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinross Gold and Agnico Eagle.

Diversification Opportunities for Kinross Gold and Agnico Eagle

0.92
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Kinross and Agnico is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Kinross Gold 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 Kinross 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 Kinross Gold 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 Kinross Gold i.e., Kinross Gold and Agnico Eagle go up and down completely randomly.

Pair Corralation between Kinross Gold and Agnico Eagle

Considering the 90-day investment horizon Kinross Gold is expected to generate 1.28 times more return on investment than Agnico Eagle. However, Kinross Gold is 1.28 times more volatile than Agnico Eagle Mines. It trades about 0.35 of its potential returns per unit of risk. Agnico Eagle Mines is currently generating about 0.38 per unit of risk. If you would invest  570.00  in Kinross Gold on January 26, 2024 and sell it today you would earn a total of  90.00  from holding Kinross Gold or generate 15.79% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Kinross Gold  vs.  Agnico Eagle Mines

 Performance 
       Timeline  
Kinross Gold 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Kinross Gold are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Kinross Gold exhibited solid returns over the last few months and may actually be approaching a breakup point.
Agnico Eagle Mines 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Agnico Eagle Mines are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady technical and fundamental indicators, Agnico Eagle displayed solid returns over the last few months and may actually be approaching a breakup point.

Kinross Gold and Agnico Eagle Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kinross Gold and Agnico Eagle

The main advantage of trading using opposite Kinross Gold and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinross 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.
The idea behind Kinross Gold and Agnico Eagle Mines pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

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