Correlation Between Osisko Gold and Agnico Eagle

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

Diversification Opportunities for Osisko Gold and Agnico Eagle

0.72

Correlation Coefficient

Osisko Gold  Agnico Eagle

Poor diversification

The 3 months correlation between Osisko and Agnico is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Osisko Gold Ro 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 Osisko 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 Osisko Gold Ro 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 Osisko Gold i.e., Osisko Gold and Agnico Eagle go up and down completely randomly.

Pair Corralation between Osisko Gold and Agnico Eagle

Allowing for the 90-day total investment horizon Osisko Gold Ro is expected to under-perform the Agnico Eagle. But the stock apears to be less risky and, when comparing its historical volatility, Osisko Gold Ro is 1.15 times less risky than Agnico Eagle. The stock trades about -0.06 of its potential returns per unit of risk. The Agnico Eagle Mines is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  8,676  in Agnico Eagle Mines on August 27, 2024 and sell it today you would lose (246.00) from holding Agnico Eagle Mines or give up 2.84% of portfolio value over 90 days.

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

Osisko Gold Ro  vs.  Agnico Eagle Mines

Osisko Gold Ro

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Osisko Gold Ro are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Osisko Gold may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Agnico Eagle Mines

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Agnico Eagle Mines are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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 Osisko Gold and Agnico Eagle

The main advantage of trading using opposite Osisko Gold and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Osisko 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 Osisko Gold Ro 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.