Correlation Between PENN NATL and Agnico Eagle
Can any of the company-specific risk be diversified away by investing in both PENN NATL 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 PENN NATL and Agnico Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PENN NATL GAMING and Agnico Eagle Mines, you can compare the effects of market volatilities on PENN NATL 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 PENN NATL with a short position of Agnico Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of PENN NATL and Agnico Eagle.
Diversification Opportunities for PENN NATL and Agnico Eagle
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PENN and Agnico is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding PENN NATL GAMING 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 PENN NATL 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 PENN NATL GAMING 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 PENN NATL i.e., PENN NATL and Agnico Eagle go up and down completely randomly.
Pair Corralation between PENN NATL and Agnico Eagle
Assuming the 90 days trading horizon PENN NATL is expected to generate 8.92 times less return on investment than Agnico Eagle. In addition to that, PENN NATL is 1.75 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 0.13 per unit of volatility. If you would invest 4,566 in Agnico Eagle Mines on September 4, 2024 and sell it today you would earn a total of 3,414 from holding Agnico Eagle Mines or generate 74.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
PENN NATL GAMING vs. Agnico Eagle Mines
Performance |
| Timeline |
| PENN NATL GAMING |
| Agnico Eagle Mines |
PENN NATL and Agnico Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PENN NATL and Agnico Eagle
The main advantage of trading using opposite PENN NATL and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN NATL 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 PENN NATL GAMING 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. PENN NATL GAMING | Agnico Eagle vs. TSOGO SUN GAMING | Agnico Eagle vs. MITSUBISHI STEEL MFG | Agnico Eagle vs. GigaMedia |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |