Correlation Between Volaris and Agnico Eagle
Can any of the company-specific risk be diversified away by investing in both Volaris 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 Volaris and Agnico Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volaris and Agnico Eagle Mines, you can compare the effects of market volatilities on Volaris 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 Volaris with a short position of Agnico Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volaris and Agnico Eagle.
Diversification Opportunities for Volaris and Agnico Eagle
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Volaris and Agnico is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Volaris 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 Volaris 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 Volaris 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 Volaris i.e., Volaris and Agnico Eagle go up and down completely randomly.
Pair Corralation between Volaris and Agnico Eagle
Given the investment horizon of 90 days Volaris is expected to generate 0.85 times more return on investment than Agnico Eagle. However, Volaris is 1.18 times less risky than Agnico Eagle. It trades about 0.08 of its potential returns per unit of risk. Agnico Eagle Mines is currently generating about -0.09 per unit of risk. If you would invest 741.00 in Volaris on August 31, 2024 and sell it today you would earn a total of 26.00 from holding Volaris or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Volaris vs. Agnico Eagle Mines
Performance |
| Timeline |
| Volaris |
| Agnico Eagle Mines |
Volaris and Agnico Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volaris and Agnico Eagle
The main advantage of trading using opposite Volaris and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volaris 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.| Volaris vs. Allegiant Travel | Volaris vs. Azul SA | Volaris vs. Alaska Air Group | Volaris vs. International Consolidated Airlines |
| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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