Correlation Between Agnico Eagle and Hochschild Mining
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and Hochschild Mining 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 Hochschild Mining 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 Hochschild Mining PLC, you can compare the effects of market volatilities on Agnico Eagle and Hochschild Mining 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 Hochschild Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and Hochschild Mining.
Diversification Opportunities for Agnico Eagle and Hochschild Mining
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agnico and Hochschild is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and Hochschild Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hochschild Mining PLC 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 Hochschild Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hochschild Mining PLC has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and Hochschild Mining go up and down completely randomly.
Pair Corralation between Agnico Eagle and Hochschild Mining
Considering the 90-day investment horizon Agnico Eagle is expected to generate 8.26 times less return on investment than Hochschild Mining. But when comparing it to its historical volatility, Agnico Eagle Mines is 2.24 times less risky than Hochschild Mining. It trades about 0.01 of its potential returns per unit of risk. Hochschild Mining PLC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 165.00 in Hochschild Mining PLC on December 29, 2023 and sell it today you would lose (3.00) from holding Hochschild Mining PLC or give up 1.82% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 99.6% |
Values | Daily Returns |
Agnico Eagle Mines vs. Hochschild Mining PLC
Performance |
Timeline |
Agnico Eagle Mines |
Hochschild Mining PLC |
Agnico Eagle and Hochschild Mining Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Agnico Eagle and Hochschild Mining
The main advantage of trading using opposite Agnico Eagle and Hochschild Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, Hochschild Mining 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 Hochschild Mining will offset losses from the drop in Hochschild Mining's long position.Agnico Eagle vs. United States Steel | Agnico Eagle vs. Chemours Co | Agnico Eagle vs. CF Industries Holdings | Agnico Eagle vs. Dupont De Nemours |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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