Correlation Between Cleantech Power and Agnico Eagle

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Can any of the company-specific risk be diversified away by investing in both Cleantech Power 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 Cleantech Power and Agnico Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cleantech Power Corp and Agnico Eagle Mines, you can compare the effects of market volatilities on Cleantech Power 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 Cleantech Power with a short position of Agnico Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cleantech Power and Agnico Eagle.

Diversification Opportunities for Cleantech Power and Agnico Eagle

CleantechAgnicoDiversified AwayCleantechAgnicoDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Cleantech and Agnico is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cleantech Power Corp 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 Cleantech Power 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 Cleantech Power Corp 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 Cleantech Power i.e., Cleantech Power and Agnico Eagle go up and down completely randomly.

Pair Corralation between Cleantech Power and Agnico Eagle

Assuming the 90 days horizon Cleantech Power Corp is expected to generate 44.06 times more return on investment than Agnico Eagle. However, Cleantech Power is 44.06 times more volatile than Agnico Eagle Mines. It trades about 0.1 of its potential returns per unit of risk. Agnico Eagle Mines is currently generating about 0.06 per unit of risk. If you would invest  5.02  in Cleantech Power Corp on September 24, 2024 and sell it today you would lose (4.43) from holding Cleantech Power Corp or give up 88.25% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy93.98%
ValuesDaily Returns

Cleantech Power Corp  vs.  Agnico Eagle Mines

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -505
JavaScript chart by amCharts 3.21.15PWWRF AEM
       Timeline  
Cleantech Power Corp 

Risk-Adjusted Performance

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Over the last 90 days Cleantech Power Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Cleantech Power is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec0.0050.00510.00520.00530.00540.00550.00560.00570.00580.0059
Agnico Eagle Mines 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Agnico Eagle Mines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Agnico Eagle is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec76788082848688

Cleantech Power and Agnico Eagle Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15 0.020.040.060.08
JavaScript chart by amCharts 3.21.15PWWRF AEM
       Returns  

Pair Trading with Cleantech Power and Agnico Eagle

The main advantage of trading using opposite Cleantech Power and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cleantech Power 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 Cleantech Power Corp 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.
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

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