Correlation Between Newmont Corp and SoftBank Group
Can any of the company-specific risk be diversified away by investing in both Newmont Corp and SoftBank Group 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 SoftBank Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newmont Corp and SoftBank Group Corp, you can compare the effects of market volatilities on Newmont Corp and SoftBank Group 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 SoftBank Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmont Corp and SoftBank Group.
Diversification Opportunities for Newmont Corp and SoftBank Group
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Newmont and SoftBank is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Newmont Corp and SoftBank Group Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SoftBank Group Corp 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 SoftBank Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SoftBank Group Corp has no effect on the direction of Newmont Corp i.e., Newmont Corp and SoftBank Group go up and down completely randomly.
Pair Corralation between Newmont Corp and SoftBank Group
Assuming the 90 days trading horizon Newmont Corp is expected to under-perform the SoftBank Group. But the stock apears to be less risky and, when comparing its historical volatility, Newmont Corp is 1.34 times less risky than SoftBank Group. The stock trades about -0.29 of its potential returns per unit of risk. The SoftBank Group Corp is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 887,400 in SoftBank Group Corp on September 24, 2024 and sell it today you would lose (11,400) from holding SoftBank Group Corp or give up 1.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 70.0% |
| Values | Daily Returns |
Newmont Corp vs. SoftBank Group Corp
Performance |
| Timeline |
| Newmont Corp |
| SoftBank Group Corp |
Newmont Corp and SoftBank Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newmont Corp and SoftBank Group
The main advantage of trading using opposite Newmont Corp and SoftBank Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmont Corp position performs unexpectedly, SoftBank Group 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 SoftBank Group will offset losses from the drop in SoftBank Group's long position.| Newmont Corp vs. Uniper SE | Newmont Corp vs. Mulberry Group PLC | Newmont Corp vs. London Security Plc | Newmont Corp vs. Triad Group PLC |
| SoftBank Group vs. Roebuck Food Group | SoftBank Group vs. Grand Vision Media | SoftBank Group vs. Everyman Media Group | SoftBank Group vs. Travel Leisure Co |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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