Correlation Between Agnico Eagle and Denison Mines

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

Diversification Opportunities for Agnico Eagle and Denison Mines

0.2

Correlation Coefficient

Agnico Eagle  Denison Mines

Modest diversification

The 3 months correlation between Agnico and Denison is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and Denison Mines Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Denison Mines 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 Denison Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Denison Mines Corp has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and Denison Mines go up and down completely randomly.

Pair Corralation between Agnico Eagle and Denison Mines

Assuming the 90 days trading horizon Agnico Eagle is expected to generate 11.25 times less return on investment than Denison Mines. But when comparing it to its historical volatility, Agnico Eagle Mines is 1.68 times less risky than Denison Mines. It trades about 0.03 of its potential returns per unit of risk. Denison Mines Corp is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  190.00  in Denison Mines Corp on April 23, 2025 and sell it today you would earn a total of  100.00  from holding Denison Mines Corp or generate 52.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Agnico Eagle Mines  vs.  Denison Mines Corp

Agnico Eagle Mines

Risk-Adjusted Performance

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 primary indicators, Agnico Eagle is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Denison Mines Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Denison Mines Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating essential indicators, Denison Mines displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Agnico Eagle and Denison Mines

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

The idea behind Agnico Eagle Mines and Denison Mines 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..