Correlation Between Agnico Eagle and SunOpta

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

Diversification Opportunities for Agnico Eagle and SunOpta

0.22

Correlation Coefficient

Agnico Eagle  SunOpta

Modest diversification

The 3 months correlation between Agnico and SunOpta is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Agnico Eagle Mines and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta and Agnico Eagle 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 SunOpta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunOpta has no effect on the direction of Agnico Eagle i.e., Agnico Eagle and SunOpta go up and down completely randomly.

Pair Corralation between Agnico Eagle and SunOpta

Assuming the 90 days trading horizon Agnico Eagle is expected to generate 6.55 times less return on investment than SunOpta. But when comparing it to its historical volatility, Agnico Eagle Mines is 1.03 times less risky than SunOpta. It trades about 0.04 of its potential returns per unit of risk. SunOpta is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  941.00  in SunOpta on September 5, 2024 and sell it today you would earn a total of  149.00  from holding SunOpta or generate 15.83% return on investment over 90 days.

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

Agnico Eagle Mines  vs.  SunOpta

Agnico Eagle Mines

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Agnico Eagle Mines are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Agnico Eagle displayed solid returns over the last few months and may actually be approaching a breakup point.

SunOpta

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SunOpta are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, SunOpta displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Agnico Eagle and SunOpta

The main advantage of trading using opposite Agnico Eagle and SunOpta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agnico Eagle position performs unexpectedly, SunOpta 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 SunOpta will offset losses from the drop in SunOpta's long position.

The idea behind Agnico Eagle Mines and SunOpta 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.