Correlation Between Agnico Eagle and MAGNUM COLDCORP

Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and MAGNUM COLDCORP 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 Agnico Eagle and MAGNUM COLDCORP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Agnico Eagle Mines and MAGNUM DCORP INC, you can compare the effects of market volatilities on Agnico Eagle and MAGNUM COLDCORP 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 Agnico Eagle with a short position of MAGNUM COLDCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and MAGNUM COLDCORP.

Diversification Opportunities for Agnico Eagle and MAGNUM COLDCORP

-0.04

Correlation Coefficient

Agnico Eagle  MAGNUM COLDCORP

Good diversification

The 3 months correlation between Agnico and MAGNUM is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and MAGNUM DCORP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAGNUM DCORP INC and Agnico Eagle 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 Agnico Eagle Mines are associated (or correlated) with MAGNUM COLDCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAGNUM DCORP INC has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and MAGNUM COLDCORP go up and down completely randomly.

Pair Corralation between Agnico Eagle and MAGNUM COLDCORP

Assuming the 90 days horizon Agnico Eagle is expected to generate 73.54 times less return on investment than MAGNUM COLDCORP. But when comparing it to its historical volatility, Agnico Eagle Mines is 35.41 times less risky than MAGNUM COLDCORP. It trades about 0.09 of its potential returns per unit of risk. MAGNUM DCORP INC is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  2.00  in MAGNUM DCORP INC on October 15, 2024 and sell it today you would earn a total of  0.34  from holding MAGNUM DCORP INC or generate 17.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Agnico Eagle Mines  vs.  MAGNUM DCORP INC

Agnico Eagle Mines

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Agnico Eagle Mines are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Agnico Eagle may actually be approaching a critical reversion point that can send shares even higher in February 2025.

MAGNUM DCORP INC

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MAGNUM DCORP INC are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking indicators, MAGNUM COLDCORP reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Agnico Eagle and MAGNUM COLDCORP

The main advantage of trading using opposite Agnico Eagle and MAGNUM COLDCORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, MAGNUM COLDCORP 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 MAGNUM COLDCORP will offset losses from the drop in MAGNUM COLDCORP's long position.

The idea behind Agnico Eagle Mines and MAGNUM DCORP INC 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.