Correlation Between Newmont Corp and Volkswagen
Can any of the company-specific risk be diversified away by investing in both Newmont Corp and Volkswagen 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 Newmont Corp and Volkswagen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newmont Corp and Volkswagen AG Non Vtg, you can compare the effects of market volatilities on Newmont Corp and Volkswagen 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 Newmont Corp with a short position of Volkswagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmont Corp and Volkswagen.
Diversification Opportunities for Newmont Corp and Volkswagen
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Newmont and Volkswagen is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Newmont Corp and Volkswagen AG Non Vtg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volkswagen AG Non and Newmont Corp 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 Newmont Corp are associated (or correlated) with Volkswagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volkswagen AG Non has no effect on the direction of Newmont Corp i.e., Newmont Corp and Volkswagen go up and down completely randomly.
Pair Corralation between Newmont Corp and Volkswagen
Assuming the 90 days trading horizon Newmont Corp is expected to generate 1.5 times more return on investment than Volkswagen. However, Newmont Corp is 1.5 times more volatile than Volkswagen AG Non Vtg. It trades about 0.05 of its potential returns per unit of risk. Volkswagen AG Non Vtg is currently generating about -0.03 per unit of risk. If you would invest 3,333 in Newmont Corp on October 29, 2024 and sell it today you would earn a total of 901.00 from holding Newmont Corp or generate 27.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.8% |
| Values | Daily Returns |
Newmont Corp vs. Volkswagen AG Non Vtg
Performance |
| Timeline |
| Newmont Corp |
| Volkswagen AG Non |
Newmont Corp and Volkswagen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newmont Corp and Volkswagen
The main advantage of trading using opposite Newmont Corp and Volkswagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmont Corp position performs unexpectedly, Volkswagen 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 Volkswagen will offset losses from the drop in Volkswagen's long position.| Newmont Corp vs. Vitec Software Group | Newmont Corp vs. Beowulf Mining | Newmont Corp vs. CNH Industrial NV | Newmont Corp vs. Auction Technology Group |
| Volkswagen vs. Fonix Mobile plc | Volkswagen vs. Aeorema Communications Plc | Volkswagen vs. Global Net Lease | Volkswagen vs. Charter Communications Cl |
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 CEOs Directory module to screen CEOs from public companies around the world.
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