Correlation Between Agnico Eagle and Ternium SA
Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and Ternium SA 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 Ternium SA 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 Ternium SA ADR, you can compare the effects of market volatilities on Agnico Eagle and Ternium SA 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 Ternium SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and Ternium SA.
Diversification Opportunities for Agnico Eagle and Ternium SA
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Agnico and Ternium is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and Ternium SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ternium SA ADR 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 Ternium SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ternium SA ADR has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and Ternium SA go up and down completely randomly.
Pair Corralation between Agnico Eagle and Ternium SA
Considering the 90-day investment horizon Agnico Eagle Mines is expected to generate 1.39 times more return on investment than Ternium SA. However, Agnico Eagle is 1.39 times more volatile than Ternium SA ADR. It trades about 0.48 of its potential returns per unit of risk. Ternium SA ADR is currently generating about 0.12 per unit of risk. If you would invest 7,821 in Agnico Eagle Mines on November 1, 2024 and sell it today you would earn a total of 1,548 from holding Agnico Eagle Mines or generate 19.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agnico Eagle Mines vs. Ternium SA ADR
Performance |
| Timeline |
| Agnico Eagle Mines |
| Ternium SA ADR |
Agnico Eagle and Ternium SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agnico Eagle and Ternium SA
The main advantage of trading using opposite Agnico Eagle and Ternium SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, Ternium SA 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 Ternium SA will offset losses from the drop in Ternium SA'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 |
| Ternium SA vs. Agnico Eagle Mines | Ternium SA vs. Pan American Silver | Ternium SA vs. Kinross Gold | Ternium SA vs. Newmont Goldcorp Corp |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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