Correlation Between Agnico Eagle and Osisko Gold

Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and Osisko Gold 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 Agnico Eagle and Osisko Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Agnico Eagle Mines and Osisko Gold Ro, you can compare the effects of market volatilities on Agnico Eagle and Osisko Gold 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 Agnico Eagle with a short position of Osisko Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and Osisko Gold.

Diversification Opportunities for Agnico Eagle and Osisko Gold

0.81

Correlation Coefficient

Agnico Eagle  Osisko Gold

Very poor diversification

The 3 months correlation between Agnico and Osisko is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and Osisko Gold Ro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osisko Gold Ro and Agnico Eagle 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 Agnico Eagle Mines are associated (or correlated) with Osisko Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osisko Gold Ro has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and Osisko Gold go up and down completely randomly.

Pair Corralation between Agnico Eagle and Osisko Gold

Considering the 90-day investment horizon Agnico Eagle Mines is expected to generate 0.95 times more return on investment than Osisko Gold. However, Agnico Eagle Mines is 1.06 times less risky than Osisko Gold. It trades about 0.2 of its potential returns per unit of risk. Osisko Gold Ro is currently generating about -0.13 per unit of risk. If you would invest  6,080  in Agnico Eagle Mines on February 2, 2024 and sell it today you would earn a total of  432.00  from holding Agnico Eagle Mines or generate 7.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Agnico Eagle Mines  vs.  Osisko Gold Ro

Agnico Eagle Mines

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Agnico Eagle Mines are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, Agnico Eagle displayed solid returns over the last few months and may actually be approaching a breakup point.

Osisko Gold Ro

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Osisko Gold Ro are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Osisko Gold is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Agnico Eagle and Osisko Gold

The main advantage of trading using opposite Agnico Eagle and Osisko Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, Osisko Gold 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 Osisko Gold will offset losses from the drop in Osisko Gold's long position.

The idea behind Agnico Eagle Mines and Osisko Gold Ro 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.

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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.