Correlation Between 50249AAD5 and Agnico Eagle

Can any of the company-specific risk be diversified away by investing in both 50249AAD5 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 50249AAD5 and Agnico Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LYB INTERNATIONAL FINANCE and Agnico Eagle Mines, you can compare the effects of market volatilities on 50249AAD5 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 50249AAD5 with a short position of Agnico Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of 50249AAD5 and Agnico Eagle.

Diversification Opportunities for 50249AAD5 and Agnico Eagle

-0.05

Correlation Coefficient

50249AAD5  Agnico Eagle

Good diversification

The 3 months correlation between 50249AAD5 and Agnico is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding LYB INTERNATIONAL FINANCE 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 50249AAD5 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 LYB INTERNATIONAL FINANCE 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 50249AAD5 i.e., 50249AAD5 and Agnico Eagle go up and down completely randomly.

Pair Corralation between 50249AAD5 and Agnico Eagle

Assuming the 90 days trading horizon LYB INTERNATIONAL FINANCE is expected to generate 43.88 times more return on investment than Agnico Eagle. However, 50249AAD5 is 43.88 times more volatile than Agnico Eagle Mines. It trades about 0.07 of its potential returns per unit of risk. Agnico Eagle Mines is currently generating about 0.06 per unit of risk. If you would invest  8,012  in LYB INTERNATIONAL FINANCE on September 26, 2024 and sell it today you would earn a total of  259.00  from holding LYB INTERNATIONAL FINANCE or generate 3.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.95%
Values	Daily Returns

LYB INTERNATIONAL FINANCE  vs.  Agnico Eagle Mines

LYB INTERNATIONAL FINANCE

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LYB INTERNATIONAL FINANCE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 50249AAD5 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the 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 50249AAD5 and Agnico Eagle

The main advantage of trading using opposite 50249AAD5 and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 50249AAD5 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 LYB INTERNATIONAL FINANCE 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..