Correlation Between Agnico Eagle and Dynasty Gold

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

Diversification Opportunities for Agnico Eagle and Dynasty Gold

-0.25

Correlation Coefficient

Agnico Eagle  Dynasty Gold

Very good diversification

The 3 months correlation between Agnico and Dynasty is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and Dynasty Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynasty Gold Corp 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 Dynasty Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynasty Gold Corp has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and Dynasty Gold go up and down completely randomly.

Pair Corralation between Agnico Eagle and Dynasty Gold

Assuming the 90 days trading horizon Agnico Eagle Mines is expected to generate 0.49 times more return on investment than Dynasty Gold. However, Agnico Eagle Mines is 2.04 times less risky than Dynasty Gold. It trades about 0.26 of its potential returns per unit of risk. Dynasty Gold Corp is currently generating about 0.05 per unit of risk. If you would invest  11,300  in Agnico Eagle Mines on December 23, 2024 and sell it today you would earn a total of  3,666  from holding Agnico Eagle Mines or generate 32.44% return on investment over 90 days.

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

Agnico Eagle Mines  vs.  Dynasty Gold Corp

Agnico Eagle Mines

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Agnico Eagle Mines are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Agnico Eagle displayed solid returns over the last few months and may actually be approaching a breakup point.

Dynasty Gold Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dynasty Gold Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Dynasty Gold may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Agnico Eagle and Dynasty Gold

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

The idea behind Agnico Eagle Mines and Dynasty Gold Corp 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.