Correlation Between Agnico-Eagle Mines and MITIE GROUP

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Can any of the company-specific risk be diversified away by investing in both Agnico-Eagle Mines and MITIE GROUP 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 Mines and MITIE GROUP 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 MITIE GROUP PLC, you can compare the effects of market volatilities on Agnico-Eagle Mines and MITIE GROUP 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 Mines with a short position of MITIE GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agnico-Eagle Mines and MITIE GROUP.

Diversification Opportunities for Agnico-Eagle Mines and MITIE GROUP

-0.42
  Correlation Coefficient

Very good diversification

The 3 months correlation between Agnico-Eagle and MITIE is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Agnico-Eagle Mines and MITIE GROUP PLC ORD 2 5P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MITIE GROUP PLC and Agnico-Eagle Mines 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 MITIE GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MITIE GROUP PLC has no effect on the direction of Agnico-Eagle Mines i.e., Agnico-Eagle Mines and MITIE GROUP go up and down completely randomly.

Pair Corralation between Agnico-Eagle Mines and MITIE GROUP

Considering the 90-day investment horizon Agnico-Eagle Mines is expected to under-perform the MITIE GROUP. In addition to that, Agnico-Eagle Mines is 1.14 times more volatile than MITIE GROUP PLC. It trades about -0.26 of its total potential returns per unit of risk. MITIE GROUP PLC is currently generating about -0.13 per unit of volatility. If you would invest  7,370  in MITIE GROUP PLC on June 26, 2022 and sell it today you would lose (450.00)  from holding MITIE GROUP PLC or give up 6.11% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy90.91%
ValuesDaily Returns

Agnico-Eagle Mines  vs.  MITIE GROUP PLC ORD 2 5P

 Performance (%) 
       Timeline  
Agnico-Eagle Mines 
Agnico-Eagle Performance
0 of 100
Over the last 90 days Agnico-Eagle Mines has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's technical and fundamental indicators remain relatively steady which may send shares a bit higher in October 2022. The new chaos may also be a sign of medium-term up-swing for the company stakeholders.

Agnico-Eagle Price Channel

MITIE GROUP PLC 
MITIE Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in MITIE GROUP PLC are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively sluggish basic indicators, MITIE GROUP revealed solid returns over the last few months and may actually be approaching a breakup point.

MITIE Price Channel

Agnico-Eagle Mines and MITIE GROUP Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Agnico-Eagle Mines and MITIE GROUP

The main advantage of trading using opposite Agnico-Eagle Mines and MITIE GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico-Eagle Mines position performs unexpectedly, MITIE GROUP 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 MITIE GROUP will offset losses from the drop in MITIE GROUP's long position.
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The idea behind Agnico-Eagle Mines and MITIE GROUP PLC 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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Check out your portfolio center. 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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