Correlation Between AIR PRODCHEMICALS and Agnico Eagle
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS and Agnico Eagle 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 AIR PRODCHEMICALS and Agnico Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and Agnico Eagle Mines, you can compare the effects of market volatilities on AIR PRODCHEMICALS and Agnico Eagle 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 AIR PRODCHEMICALS with a short position of Agnico Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and Agnico Eagle.
Diversification Opportunities for AIR PRODCHEMICALS and Agnico Eagle
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AIR and Agnico is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS and Agnico Eagle Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agnico Eagle Mines and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS are associated (or correlated) with Agnico Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agnico Eagle Mines has no effect on the direction of AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and Agnico Eagle go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and Agnico Eagle
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to generate 4.55 times less return on investment than Agnico Eagle. But when comparing it to its historical volatility, AIR PRODCHEMICALS is 1.06 times less risky than Agnico Eagle. It trades about 0.03 of its potential returns per unit of risk. Agnico Eagle Mines is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,416 in Agnico Eagle Mines on November 28, 2024 and sell it today you would earn a total of 4,700 from holding Agnico Eagle Mines or generate 106.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. Agnico Eagle Mines
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| Agnico Eagle Mines |
AIR PRODCHEMICALS and Agnico Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and Agnico Eagle
The main advantage of trading using opposite AIR PRODCHEMICALS and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS position performs unexpectedly, Agnico Eagle 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 Agnico Eagle will offset losses from the drop in Agnico Eagle's long position.| AIR PRODCHEMICALS vs. BII Railway Transportation | AIR PRODCHEMICALS vs. DICKS Sporting Goods | AIR PRODCHEMICALS vs. Meli Hotels International | AIR PRODCHEMICALS vs. MELIA HOTELS |
| Agnico Eagle vs. GEELY AUTOMOBILE | Agnico Eagle vs. ProSiebenSat1 Media SE | Agnico Eagle vs. ANTA Sports Products | Agnico Eagle vs. Motorcar Parts of |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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