Correlation Between Agnico Eagle and Methanex
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and Methanex 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 Methanex 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 Methanex, you can compare the effects of market volatilities on Agnico Eagle and Methanex 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 Methanex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and Methanex.
Diversification Opportunities for Agnico Eagle and Methanex
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Agnico and Methanex is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and Methanex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Methanex 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 Methanex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Methanex has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and Methanex go up and down completely randomly.
Pair Corralation between Agnico Eagle and Methanex
Considering the 90-day investment horizon Agnico Eagle is expected to generate 2.74 times less return on investment than Methanex. In addition to that, Agnico Eagle is 1.14 times more volatile than Methanex. It trades about 0.05 of its total potential returns per unit of risk. Methanex is currently generating about 0.16 per unit of volatility. If you would invest 4,134 in Methanex on August 30, 2024 and sell it today you would earn a total of 518.00 from holding Methanex or generate 12.53% 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. Methanex
Performance |
| Timeline |
| Agnico Eagle Mines |
| Methanex |
Agnico Eagle and Methanex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agnico Eagle and Methanex
The main advantage of trading using opposite Agnico Eagle and Methanex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, Methanex 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 Methanex will offset losses from the drop in Methanex'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 |
| Methanex vs. AdvanSix | Methanex vs. Lsb Industries | Methanex vs. Green Plains Renewable | Methanex vs. Tronox Holdings PLC |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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