Correlation Between Newmont Corp and Sherborne Investors
Can any of the company-specific risk be diversified away by investing in both Newmont Corp and Sherborne Investors 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 Sherborne Investors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newmont Corp and Sherborne Investors Guernsey, you can compare the effects of market volatilities on Newmont Corp and Sherborne Investors 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 Sherborne Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmont Corp and Sherborne Investors.
Diversification Opportunities for Newmont Corp and Sherborne Investors
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Newmont and Sherborne is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Newmont Corp and Sherborne Investors Guernsey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sherborne Investors 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 Sherborne Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sherborne Investors has no effect on the direction of Newmont Corp i.e., Newmont Corp and Sherborne Investors go up and down completely randomly.
Pair Corralation between Newmont Corp and Sherborne Investors
Assuming the 90 days trading horizon Newmont Corp is expected to generate 1.56 times more return on investment than Sherborne Investors. However, Newmont Corp is 1.56 times more volatile than Sherborne Investors Guernsey. It trades about -0.22 of its potential returns per unit of risk. Sherborne Investors Guernsey is currently generating about -0.39 per unit of risk. If you would invest 4,196 in Newmont Corp on October 9, 2024 and sell it today you would lose (348.00) from holding Newmont Corp or give up 8.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newmont Corp vs. Sherborne Investors Guernsey
Performance |
| Timeline |
| Newmont Corp |
| Sherborne Investors |
Newmont Corp and Sherborne Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newmont Corp and Sherborne Investors
The main advantage of trading using opposite Newmont Corp and Sherborne Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmont Corp position performs unexpectedly, Sherborne Investors 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 Sherborne Investors will offset losses from the drop in Sherborne Investors' long position.| Newmont Corp vs. Mobius Investment Trust | Newmont Corp vs. Medical Properties Trust | Newmont Corp vs. Flow Traders NV | Newmont Corp vs. Vietnam Enterprise Investments |
| Sherborne Investors vs. BYD Co | Sherborne Investors vs. Volkswagen AG Non Vtg | Sherborne Investors vs. United Parcel Service | Sherborne Investors vs. Jardine Matheson Holdings |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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