Correlation Between Mayfair Gold and Agnico Eagle

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

Diversification Opportunities for Mayfair Gold and Agnico Eagle

0.31

Correlation Coefficient

Mayfair Gold  Agnico Eagle

Weak diversification

The 3 months correlation between Mayfair and Agnico is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Mayfair Gold Corp 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 Mayfair 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 Mayfair Gold Corp 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 Mayfair Gold i.e., Mayfair Gold and Agnico Eagle go up and down completely randomly.

Pair Corralation between Mayfair Gold and Agnico Eagle

Assuming the 90 days horizon Mayfair Gold Corp is expected to under-perform the Agnico Eagle. In addition to that, Mayfair Gold is 1.1 times more volatile than Agnico Eagle Mines. It trades about -0.07 of its total potential returns per unit of risk. Agnico Eagle Mines is currently generating about -0.04 per unit of volatility. If you would invest  8,221  in Agnico Eagle Mines on September 22, 2024 and sell it today you would lose (485.00) from holding Agnico Eagle Mines or give up 5.9% of portfolio value over 90 days.

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

Mayfair Gold Corp  vs.  Agnico Eagle Mines

Mayfair Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mayfair Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Agnico Eagle Mines

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agnico Eagle Mines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Agnico Eagle is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Mayfair Gold and Agnico Eagle

The main advantage of trading using opposite Mayfair Gold and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mayfair 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 Mayfair Gold Corp 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.

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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.