Correlation Between KIMBERLY and Agnico Eagle

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

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

Diversification Opportunities for KIMBERLY and Agnico Eagle

-0.28

Correlation Coefficient

KIMBERLY  Agnico Eagle

Very good diversification

The 3 months correlation between KIMBERLY and Agnico is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding KIMBERLY CLARK PORATION 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 KIMBERLY 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 KIMBERLY CLARK PORATION 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 KIMBERLY i.e., KIMBERLY and Agnico Eagle go up and down completely randomly.

Pair Corralation between KIMBERLY and Agnico Eagle

Assuming the 90 days trading horizon KIMBERLY CLARK PORATION is expected to under-perform the Agnico Eagle. But the bond apears to be less risky and, when comparing its historical volatility, KIMBERLY CLARK PORATION is 2.6 times less risky than Agnico Eagle. The bond trades about -0.19 of its potential returns per unit of risk. The Agnico Eagle Mines is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  8,216  in Agnico Eagle Mines on September 15, 2024 and sell it today you would earn a total of  156.00  from holding Agnico Eagle Mines or generate 1.9% return on investment over 90 days.

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

KIMBERLY CLARK PORATION  vs.  Agnico Eagle Mines

KIMBERLY CLARK PORATION

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KIMBERLY CLARK PORATION has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for KIMBERLY CLARK PORATION investors.

Agnico Eagle Mines

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Agnico Eagle Mines are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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 KIMBERLY and Agnico Eagle

The main advantage of trading using opposite KIMBERLY and Agnico Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIMBERLY 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 KIMBERLY CLARK PORATION 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.