Correlation Between Agnico Eagle and APPLIED MATERIALS
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and APPLIED MATERIALS 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 APPLIED MATERIALS 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 APPLIED MATERIALS, you can compare the effects of market volatilities on Agnico Eagle and APPLIED MATERIALS 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 APPLIED MATERIALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and APPLIED MATERIALS.
Diversification Opportunities for Agnico Eagle and APPLIED MATERIALS
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Agnico and APPLIED is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and APPLIED MATERIALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPLIED MATERIALS 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 APPLIED MATERIALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APPLIED MATERIALS has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and APPLIED MATERIALS go up and down completely randomly.
Pair Corralation between Agnico Eagle and APPLIED MATERIALS
Assuming the 90 days horizon Agnico Eagle Mines is expected to generate 0.69 times more return on investment than APPLIED MATERIALS. However, Agnico Eagle Mines is 1.45 times less risky than APPLIED MATERIALS. It trades about 0.11 of its potential returns per unit of risk. APPLIED MATERIALS is currently generating about -0.02 per unit of risk. If you would invest 6,029 in Agnico Eagle Mines on September 3, 2024 and sell it today you would earn a total of 1,951 from holding Agnico Eagle Mines or generate 32.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agnico Eagle Mines vs. APPLIED MATERIALS
Performance |
| Timeline |
| Agnico Eagle Mines |
| APPLIED MATERIALS |
Agnico Eagle and APPLIED MATERIALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agnico Eagle and APPLIED MATERIALS
The main advantage of trading using opposite Agnico Eagle and APPLIED MATERIALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, APPLIED MATERIALS 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 APPLIED MATERIALS will offset losses from the drop in APPLIED MATERIALS's long position.| Agnico Eagle vs. ZIJIN MINH UNSPADR20 | Agnico Eagle vs. Barrick Gold | Agnico Eagle vs. Superior Plus Corp | Agnico Eagle vs. NMI Holdings |
| APPLIED MATERIALS vs. BJs Wholesale Club | APPLIED MATERIALS vs. United Internet AG | APPLIED MATERIALS vs. Entravision Communications | APPLIED MATERIALS vs. Cogent Communications Holdings |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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