Correlation Between Agnico Eagle and CDW Corp
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and CDW Corp 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 CDW Corp 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 CDW Corp, you can compare the effects of market volatilities on Agnico Eagle and CDW Corp 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 CDW Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and CDW Corp.
Diversification Opportunities for Agnico Eagle and CDW Corp
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Agnico and CDW is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and CDW Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDW 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 CDW Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDW Corp has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and CDW Corp go up and down completely randomly.
Pair Corralation between Agnico Eagle and CDW Corp
Considering the 90-day investment horizon Agnico Eagle Mines is expected to generate 1.3 times more return on investment than CDW Corp. However, Agnico Eagle is 1.3 times more volatile than CDW Corp. It trades about -0.01 of its potential returns per unit of risk. CDW Corp is currently generating about -0.15 per unit of risk. If you would invest 8,539 in Agnico Eagle Mines on September 2, 2024 and sell it today you would lose (97.00) from holding Agnico Eagle Mines or give up 1.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agnico Eagle Mines vs. CDW Corp
Performance |
| Timeline |
| Agnico Eagle Mines |
| CDW Corp |
Agnico Eagle and CDW Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agnico Eagle and CDW Corp
The main advantage of trading using opposite Agnico Eagle and CDW Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, CDW Corp 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 CDW Corp will offset losses from the drop in CDW Corp'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 |
| CDW Corp vs. Knowles Cor | CDW Corp vs. Ubiquiti Networks | CDW Corp vs. AmpliTech Group | CDW Corp vs. Viavi Solutions |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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