Correlation Between CN MODERN and Newmont
Can any of the company-specific risk be diversified away by investing in both CN MODERN and Newmont 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 CN MODERN and Newmont into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CN MODERN DAIRY and Newmont, you can compare the effects of market volatilities on CN MODERN and Newmont 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 CN MODERN with a short position of Newmont. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and Newmont.
Diversification Opportunities for CN MODERN and Newmont
Very good diversification
The 3 months correlation between 07M and Newmont is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and Newmont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont and CN MODERN 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 CN MODERN DAIRY are associated (or correlated) with Newmont. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmont has no effect on the direction of CN MODERN i.e., CN MODERN and Newmont go up and down completely randomly.
Pair Corralation between CN MODERN and Newmont
Assuming the 90 days trading horizon CN MODERN is expected to generate 2.68 times less return on investment than Newmont. In addition to that, CN MODERN is 1.6 times more volatile than Newmont. It trades about 0.03 of its total potential returns per unit of risk. Newmont is currently generating about 0.13 per unit of volatility. If you would invest 3,832 in Newmont on September 13, 2024 and sell it today you would earn a total of 150.00 from holding Newmont or generate 3.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CN MODERN DAIRY vs. Newmont
Performance |
| Timeline |
| CN MODERN DAIRY |
| Newmont |
CN MODERN and Newmont Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and Newmont
The main advantage of trading using opposite CN MODERN and Newmont positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, Newmont 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 Newmont will offset losses from the drop in Newmont's long position.The idea behind CN MODERN DAIRY and Newmont 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.| Newmont vs. Lion One Metals | Newmont vs. Ping An Insurance | Newmont vs. Universal Insurance Holdings | Newmont vs. MSAD INSURANCE |
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 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..
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