Correlation Between ONEOK and Newmont Corp
Can any of the company-specific risk be diversified away by investing in both ONEOK and Newmont Corp 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 ONEOK and Newmont Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ONEOK Inc and Newmont Corp, you can compare the effects of market volatilities on ONEOK and Newmont Corp 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 ONEOK with a short position of Newmont Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of ONEOK and Newmont Corp.
Diversification Opportunities for ONEOK and Newmont Corp
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ONEOK and Newmont is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding ONEOK Inc and Newmont Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont Corp and ONEOK 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 ONEOK Inc are associated (or correlated) with Newmont Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmont Corp has no effect on the direction of ONEOK i.e., ONEOK and Newmont Corp go up and down completely randomly.
Pair Corralation between ONEOK and Newmont Corp
Assuming the 90 days trading horizon ONEOK Inc is expected to generate 0.78 times more return on investment than Newmont Corp. However, ONEOK Inc is 1.29 times less risky than Newmont Corp. It trades about 0.11 of its potential returns per unit of risk. Newmont Corp is currently generating about 0.0 per unit of risk. If you would invest 7,761 in ONEOK Inc on October 13, 2024 and sell it today you would earn a total of 2,362 from holding ONEOK Inc or generate 30.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.3% |
| Values | Daily Returns |
ONEOK Inc vs. Newmont Corp
Performance |
| Timeline |
| ONEOK Inc |
| Newmont Corp |
ONEOK and Newmont Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ONEOK and Newmont Corp
The main advantage of trading using opposite ONEOK and Newmont Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ONEOK position performs unexpectedly, Newmont Corp 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 Corp will offset losses from the drop in Newmont Corp's long position.| ONEOK vs. Anglo Asian Mining | ONEOK vs. Teradata Corp | ONEOK vs. iShares Physical Silver | ONEOK vs. Lundin Mining Corp |
| Newmont Corp vs. Lindsell Train Investment | Newmont Corp vs. Adriatic Metals | Newmont Corp vs. Empire Metals Limited | Newmont Corp vs. EJF Investments |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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