Correlation Between Cumberland Pharmaceuticals and Agnico Eagle
Can any of the company-specific risk be diversified away by investing in both Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals and Agnico Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cumberland Pharmaceuticals and Agnico Eagle Mines, you can compare the effects of market volatilities on Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals with a short position of Agnico Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cumberland Pharmaceuticals and Agnico Eagle.
Diversification Opportunities for Cumberland Pharmaceuticals and Agnico Eagle
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cumberland and Agnico is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals 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 Cumberland Pharmaceuticals i.e., Cumberland Pharmaceuticals and Agnico Eagle go up and down completely randomly.
Pair Corralation between Cumberland Pharmaceuticals and Agnico Eagle
Given the investment horizon of 90 days Cumberland Pharmaceuticals is expected to generate 4.76 times less return on investment than Agnico Eagle. In addition to that, Cumberland Pharmaceuticals is 2.12 times more volatile than Agnico Eagle Mines. It trades about 0.01 of its total potential returns per unit of risk. Agnico Eagle Mines is currently generating about 0.09 per unit of volatility. If you would invest 4,955 in Agnico Eagle Mines on August 31, 2024 and sell it today you would earn a total of 3,487 from holding Agnico Eagle Mines or generate 70.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cumberland Pharmaceuticals vs. Agnico Eagle Mines
Performance |
| Timeline |
| Cumberland Pharmaceuticals |
| Agnico Eagle Mines |
Cumberland Pharmaceuticals and Agnico Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cumberland Pharmaceuticals and Agnico Eagle
The main advantage of trading using opposite Cumberland Pharmaceuticals and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cumberland Pharmaceuticals 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.The idea behind Cumberland Pharmaceuticals and Agnico Eagle Mines pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Agnico Eagle vs. Franco Nevada | Agnico Eagle vs. Alamos Gold | Agnico Eagle vs. Seabridge Gold | Agnico Eagle vs. Osisko Gold Ro |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| CEOs Directory Screen CEOs from public companies around the world | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |