Correlation Between Agnico Eagle and Balchem
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and Balchem 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 Balchem 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 Balchem, you can compare the effects of market volatilities on Agnico Eagle and Balchem 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 Balchem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and Balchem.
Diversification Opportunities for Agnico Eagle and Balchem
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Agnico and Balchem is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and Balchem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balchem 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 Balchem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balchem has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and Balchem go up and down completely randomly.
Pair Corralation between Agnico Eagle and Balchem
Considering the 90-day investment horizon Agnico Eagle Mines is expected to generate 1.28 times more return on investment than Balchem. However, Agnico Eagle is 1.28 times more volatile than Balchem. It trades about 0.09 of its potential returns per unit of risk. Balchem is currently generating about 0.06 per unit of risk. If you would invest 4,899 in Agnico Eagle Mines on September 1, 2024 and sell it today you would earn a total of 3,543 from holding Agnico Eagle Mines or generate 72.32% 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. Balchem
Performance |
| Timeline |
| Agnico Eagle Mines |
| Balchem |
Agnico Eagle and Balchem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agnico Eagle and Balchem
The main advantage of trading using opposite Agnico Eagle and Balchem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, Balchem 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 Balchem will offset losses from the drop in Balchem'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 |
| Balchem vs. Sensient Technologies | Balchem vs. Innospec | Balchem vs. Minerals Technologies | Balchem vs. Oil Dri |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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