Correlation Between Agnico Eagle and ODYSSEY GOLD

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

Diversification Opportunities for Agnico Eagle and ODYSSEY GOLD

-0.33

Correlation Coefficient

Agnico Eagle  ODYSSEY GOLD

Very good diversification

The 3 months correlation between Agnico and ODYSSEY is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and ODYSSEY GOLD LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ODYSSEY GOLD LTD 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 ODYSSEY GOLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ODYSSEY GOLD LTD has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and ODYSSEY GOLD go up and down completely randomly.

Pair Corralation between Agnico Eagle and ODYSSEY GOLD

Assuming the 90 days horizon Agnico Eagle Mines is expected to generate 0.24 times more return on investment than ODYSSEY GOLD. However, Agnico Eagle Mines is 4.2 times less risky than ODYSSEY GOLD. It trades about 0.02 of its potential returns per unit of risk. ODYSSEY GOLD LTD is currently generating about -0.01 per unit of risk. If you would invest  7,484  in Agnico Eagle Mines on September 23, 2024 and sell it today you would earn a total of  80.00  from holding Agnico Eagle Mines or generate 1.07% 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.  ODYSSEY GOLD LTD

Agnico Eagle Mines

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Agnico Eagle Mines are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Agnico Eagle is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

ODYSSEY GOLD LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ODYSSEY GOLD LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ODYSSEY GOLD is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Agnico Eagle and ODYSSEY GOLD

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

The idea behind Agnico Eagle Mines and ODYSSEY GOLD LTD 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.