Correlation Between Agnico Eagle and Apogee Enterprises

Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and Apogee Enterprises 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 Apogee Enterprises 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 Apogee Enterprises, you can compare the effects of market volatilities on Agnico Eagle and Apogee Enterprises 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 Apogee Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and Apogee Enterprises.

Diversification Opportunities for Agnico Eagle and Apogee Enterprises

-0.07

Correlation Coefficient

Agnico Eagle  Apogee Enterprises

Good diversification

The 3 months correlation between Agnico and Apogee is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and Apogee Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apogee Enterprises 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 Apogee Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apogee Enterprises has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and Apogee Enterprises go up and down completely randomly.

Pair Corralation between Agnico Eagle and Apogee Enterprises

Considering the 90-day investment horizon Agnico Eagle is expected to generate 1.14 times less return on investment than Apogee Enterprises. But when comparing it to its historical volatility, Agnico Eagle Mines is 1.08 times less risky than Apogee Enterprises. It trades about 0.06 of its potential returns per unit of risk. Apogee Enterprises is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  4,269  in Apogee Enterprises on September 19, 2024 and sell it today you would earn a total of  2,920  from holding Apogee Enterprises or generate 68.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Agnico Eagle Mines  vs.  Apogee Enterprises

Agnico Eagle Mines

Risk-Adjusted Performance

0 of 100

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.

Apogee Enterprises

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Apogee Enterprises are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Apogee Enterprises may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Agnico Eagle and Apogee Enterprises

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

The idea behind Agnico Eagle Mines and Apogee Enterprises 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 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..