Correlation Between Aerofoam Metals and Agnico Eagle

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

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

Diversification Opportunities for Aerofoam Metals and Agnico Eagle

0.0

Correlation Coefficient

Aerofoam Metals  Agnico Eagle

Pay attention - limited upside

The 3 months correlation between Aerofoam and Agnico is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aerofoam Metals 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 Aerofoam Metals 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 Aerofoam Metals 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 Aerofoam Metals i.e., Aerofoam Metals and Agnico Eagle go up and down completely randomly.

Pair Corralation between Aerofoam Metals and Agnico Eagle

If you would invest  6,787  in Agnico Eagle Mines on September 24, 2024 and sell it today you would earn a total of  1,029  from holding Agnico Eagle Mines or generate 15.16% return on investment over 90 days.

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

Aerofoam Metals  vs.  Agnico Eagle Mines

Aerofoam Metals

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Aerofoam Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent primary indicators, Aerofoam Metals is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Agnico Eagle Mines

Risk-Adjusted Performance

0 of 100

Very 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.

Pair Trading with Aerofoam Metals and Agnico Eagle

The main advantage of trading using opposite Aerofoam Metals and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerofoam Metals 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.

The idea behind Aerofoam Metals and Agnico Eagle Mines 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.