Correlation Between Mosaic and Agnico Eagle

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

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

Diversification Opportunities for Mosaic and Agnico Eagle

0.57

Correlation Coefficient

Mosaic  Agnico Eagle

Very weak diversification

The 3 months correlation between Mosaic and Agnico is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding The Mosaic 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 Mosaic 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 The Mosaic 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 Mosaic i.e., Mosaic and Agnico Eagle go up and down completely randomly.

Pair Corralation between Mosaic and Agnico Eagle

Considering the 90-day investment horizon The Mosaic is expected to generate 0.97 times more return on investment than Agnico Eagle. However, The Mosaic is 1.03 times less risky than Agnico Eagle. It trades about -0.04 of its potential returns per unit of risk. Agnico Eagle Mines is currently generating about -0.08 per unit of risk. If you would invest  2,561  in The Mosaic on October 6, 2024 and sell it today you would lose (46.00) from holding The Mosaic or give up 1.8% of portfolio value over 90 days.

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

The Mosaic  vs.  Agnico Eagle Mines

Mosaic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Mosaic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Mosaic is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Agnico Eagle Mines

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Agnico Eagle Mines are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Agnico Eagle may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Mosaic and Agnico Eagle

The main advantage of trading using opposite Mosaic and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mosaic 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 The Mosaic 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.