Correlation Between Agnico Eagle and Ross Stores
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and Ross Stores 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 Ross Stores 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 Ross Stores, you can compare the effects of market volatilities on Agnico Eagle and Ross Stores 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 Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and Ross Stores.
Diversification Opportunities for Agnico Eagle and Ross Stores
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Agnico and Ross is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores 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 Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and Ross Stores go up and down completely randomly.
Pair Corralation between Agnico Eagle and Ross Stores
Considering the 90-day investment horizon Agnico Eagle Mines is expected to generate 1.47 times more return on investment than Ross Stores. However, Agnico Eagle is 1.47 times more volatile than Ross Stores. It trades about 0.11 of its potential returns per unit of risk. Ross Stores is currently generating about 0.05 per unit of risk. If you would invest 5,268 in Agnico Eagle Mines on August 26, 2024 and sell it today you would earn a total of 3,162 from holding Agnico Eagle Mines or generate 60.02% 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. Ross Stores
Performance |
| Timeline |
| Agnico Eagle Mines |
| Ross Stores |
Agnico Eagle and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agnico Eagle and Ross Stores
The main advantage of trading using opposite Agnico Eagle and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, Ross Stores 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 Ross Stores will offset losses from the drop in Ross Stores' 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 |
| Ross Stores vs. Burlington Stores | Ross Stores vs. American Eagle Outfitters | Ross Stores vs. Lululemon Athletica | Ross Stores vs. Foot Locker |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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