Correlation Between Agnico Eagle and DRDGOLD Limited
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and DRDGOLD Limited 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 DRDGOLD Limited 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 DRDGOLD Limited ADR, you can compare the effects of market volatilities on Agnico Eagle and DRDGOLD Limited 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 DRDGOLD Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and DRDGOLD Limited.
Diversification Opportunities for Agnico Eagle and DRDGOLD Limited
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Agnico and DRDGOLD is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and DRDGOLD Limited ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DRDGOLD Limited ADR 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 DRDGOLD Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DRDGOLD Limited ADR has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and DRDGOLD Limited go up and down completely randomly.
Pair Corralation between Agnico Eagle and DRDGOLD Limited
Considering the 90-day investment horizon Agnico Eagle Mines is expected to generate 0.67 times more return on investment than DRDGOLD Limited. However, Agnico Eagle Mines is 1.49 times less risky than DRDGOLD Limited. It trades about 0.1 of its potential returns per unit of risk. DRDGOLD Limited ADR is currently generating about 0.01 per unit of risk. If you would invest 10,509 in Agnico Eagle Mines on March 25, 2025 and sell it today you would earn a total of 1,593 from holding Agnico Eagle Mines or generate 15.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agnico Eagle Mines vs. DRDGOLD Limited ADR
Performance |
| Timeline |
| Agnico Eagle Mines |
| DRDGOLD Limited ADR |
Agnico Eagle and DRDGOLD Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agnico Eagle and DRDGOLD Limited
The main advantage of trading using opposite Agnico Eagle and DRDGOLD Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, DRDGOLD Limited 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 DRDGOLD Limited will offset losses from the drop in DRDGOLD Limited's long position.| Agnico Eagle vs. Wheaton Precious Metals | Agnico Eagle vs. Newmont Goldcorp Corp | Agnico Eagle vs. Kinross Gold | Agnico Eagle vs. Gold Fields Ltd |
| DRDGOLD Limited vs. Osisko Gold Ro | DRDGOLD Limited vs. Eldorado Gold Corp | DRDGOLD Limited vs. SSR Mining | DRDGOLD Limited vs. Idaho Strategic Resources |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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