Correlation Between Agnico Eagle and WPLAU

Can any of the company-specific risk be diversified away by investing in both Agnico Eagle and WPLAU 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 WPLAU 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 WPLAU 37 15 SEP 26, you can compare the effects of market volatilities on Agnico Eagle and WPLAU 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 WPLAU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico Eagle and WPLAU.

Diversification Opportunities for Agnico Eagle and WPLAU

0.27

Correlation Coefficient

Agnico Eagle  WPLAU

Modest diversification

The 3 months correlation between Agnico and WPLAU is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and WPLAU 37 15 SEP 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WPLAU 37 15 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 WPLAU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WPLAU 37 15 has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and WPLAU go up and down completely randomly.

Pair Corralation between Agnico Eagle and WPLAU

Considering the 90-day investment horizon Agnico Eagle Mines is expected to generate 4.51 times more return on investment than WPLAU. However, Agnico Eagle is 4.51 times more volatile than WPLAU 37 15 SEP 26. It trades about 0.06 of its potential returns per unit of risk. WPLAU 37 15 SEP 26 is currently generating about 0.09 per unit of risk. If you would invest  4,929  in Agnico Eagle Mines on September 19, 2024 and sell it today you would earn a total of  2,847  from holding Agnico Eagle Mines or generate 57.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	24.19%
Values	Daily Returns

Agnico Eagle Mines  vs.  WPLAU 37 15 SEP 26

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.

WPLAU 37 15

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in WPLAU 37 15 SEP 26 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, WPLAU is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Agnico Eagle and WPLAU

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

The idea behind Agnico Eagle Mines and WPLAU 37 15 SEP 26 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.