Correlation Between PENN NATL and Agnico Eagle

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

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

Diversification Opportunities for PENN NATL and Agnico Eagle

0.0

Correlation Coefficient

PENN NATL  Agnico Eagle

Pay attention - limited upside

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

Pair Corralation between PENN NATL and Agnico Eagle

Assuming the 90 days trading horizon PENN NATL GAMING is expected to under-perform the Agnico Eagle. In addition to that, PENN NATL is 1.66 times more volatile than Agnico Eagle Mines. It trades about -0.04 of its total potential returns per unit of risk. Agnico Eagle Mines is currently generating about 0.23 per unit of volatility. If you would invest  7,528  in Agnico Eagle Mines on December 26, 2024 and sell it today you would earn a total of  2,098  from holding Agnico Eagle Mines or generate 27.87% return on investment over 90 days.

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

PENN NATL GAMING  vs.  Agnico Eagle Mines

PENN NATL GAMING

Risk-Adjusted Performance

Very Weak

Over the last 90 days PENN NATL GAMING has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Agnico Eagle Mines

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Agnico Eagle Mines are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Agnico Eagle reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PENN NATL and Agnico Eagle

The main advantage of trading using opposite PENN NATL and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PENN NATL 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 PENN NATL GAMING 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.