Correlation Between Newmont Corp and Edinburgh Investment
Can any of the company-specific risk be diversified away by investing in both Newmont Corp and Edinburgh Investment 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 Edinburgh Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newmont Corp and Edinburgh Investment Trust, you can compare the effects of market volatilities on Newmont Corp and Edinburgh Investment 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 Edinburgh Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmont Corp and Edinburgh Investment.
Diversification Opportunities for Newmont Corp and Edinburgh Investment
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Newmont and Edinburgh is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Newmont Corp and Edinburgh Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edinburgh Investment 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 Edinburgh Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edinburgh Investment has no effect on the direction of Newmont Corp i.e., Newmont Corp and Edinburgh Investment go up and down completely randomly.
Pair Corralation between Newmont Corp and Edinburgh Investment
Assuming the 90 days trading horizon Newmont Corp is expected to generate 1.67 times more return on investment than Edinburgh Investment. However, Newmont Corp is 1.67 times more volatile than Edinburgh Investment Trust. It trades about 0.41 of its potential returns per unit of risk. Edinburgh Investment Trust is currently generating about 0.15 per unit of risk. If you would invest 3,831 in Newmont Corp on October 25, 2024 and sell it today you would earn a total of 424.00 from holding Newmont Corp or generate 11.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newmont Corp vs. Edinburgh Investment Trust
Performance |
| Timeline |
| Newmont Corp |
| Edinburgh Investment |
Newmont Corp and Edinburgh Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newmont Corp and Edinburgh Investment
The main advantage of trading using opposite Newmont Corp and Edinburgh Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmont Corp position performs unexpectedly, Edinburgh Investment 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 Edinburgh Investment will offset losses from the drop in Edinburgh Investment's long position.| Newmont Corp vs. Orient Telecoms | Newmont Corp vs. Blackrock World Mining | Newmont Corp vs. First Class Metals | Newmont Corp vs. Solstad Offshore ASA |
| Edinburgh Investment vs. Indutrade AB | Edinburgh Investment vs. Lindsell Train Investment | Edinburgh Investment vs. Various Eateries PLC | Edinburgh Investment vs. Norman Broadbent Plc |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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