Correlation Between Agnico Eagle and Shorepower Technologies

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

Diversification Opportunities for Agnico Eagle and Shorepower Technologies

0.31

Correlation Coefficient

Agnico Eagle  Shorepower Technologies

Weak diversification

The 3 months correlation between Agnico and Shorepower is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and Shorepower Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shorepower Technologies 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 Shorepower Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shorepower Technologies has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and Shorepower Technologies go up and down completely randomly.

Pair Corralation between Agnico Eagle and Shorepower Technologies

Considering the 90-day investment horizon Agnico Eagle is expected to generate 15.52 times less return on investment than Shorepower Technologies. But when comparing it to its historical volatility, Agnico Eagle Mines is 11.49 times less risky than Shorepower Technologies. It trades about 0.19 of its potential returns per unit of risk. Shorepower Technologies is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  1.80  in Shorepower Technologies on September 15, 2024 and sell it today you would earn a total of  2.70  from holding Shorepower Technologies or generate 150.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Agnico Eagle Mines  vs.  Shorepower Technologies

Agnico Eagle Mines

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Agnico Eagle Mines are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Shorepower Technologies

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Shorepower Technologies are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent technical and fundamental indicators, Shorepower Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Agnico Eagle and Shorepower Technologies

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

The idea behind Agnico Eagle Mines and Shorepower Technologies 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.