Correlation Between Agnico Eagle and INNOVATEC SPA
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and INNOVATEC SPA 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 INNOVATEC SPA 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 INNOVATEC SPA, you can compare the effects of market volatilities on Agnico Eagle and INNOVATEC SPA 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 INNOVATEC SPA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and INNOVATEC SPA.
Diversification Opportunities for Agnico Eagle and INNOVATEC SPA
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Agnico and INNOVATEC is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and INNOVATEC SPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INNOVATEC SPA 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 INNOVATEC SPA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INNOVATEC SPA has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and INNOVATEC SPA go up and down completely randomly.
Pair Corralation between Agnico Eagle and INNOVATEC SPA
Assuming the 90 days horizon Agnico Eagle Mines is expected to generate 0.43 times more return on investment than INNOVATEC SPA. However, Agnico Eagle Mines is 2.35 times less risky than INNOVATEC SPA. It trades about 0.25 of its potential returns per unit of risk. INNOVATEC SPA is currently generating about 0.08 per unit of risk. If you would invest 7,293 in Agnico Eagle Mines on September 12, 2024 and sell it today you would earn a total of 943.00 from holding Agnico Eagle Mines or generate 12.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Agnico Eagle Mines vs. INNOVATEC SPA
Performance |
| Timeline |
| Agnico Eagle Mines |
| INNOVATEC SPA |
Agnico Eagle and INNOVATEC SPA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agnico Eagle and INNOVATEC SPA
The main advantage of trading using opposite Agnico Eagle and INNOVATEC SPA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, INNOVATEC SPA 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 INNOVATEC SPA will offset losses from the drop in INNOVATEC SPA's long position.| Agnico Eagle vs. Franco Nevada | Agnico Eagle vs. Superior Plus Corp | Agnico Eagle vs. SIVERS SEMICONDUCTORS AB | Agnico Eagle vs. Norsk Hydro ASA |
| INNOVATEC SPA vs. KENEDIX OFFICE INV | INNOVATEC SPA vs. PENN NATL GAMING | INNOVATEC SPA vs. GigaMedia | INNOVATEC SPA vs. FANDIFI TECHNOLOGY P |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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