Correlation Between American Public and Newmont
Can any of the company-specific risk be diversified away by investing in both American Public and Newmont 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 American Public and Newmont into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Public Education and Newmont, you can compare the effects of market volatilities on American Public and Newmont 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 American Public with a short position of Newmont. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Public and Newmont.
Diversification Opportunities for American Public and Newmont
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Newmont is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding American Public Education and Newmont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont and American Public 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 American Public Education are associated (or correlated) with Newmont. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmont has no effect on the direction of American Public i.e., American Public and Newmont go up and down completely randomly.
Pair Corralation between American Public and Newmont
Assuming the 90 days horizon American Public Education is expected to generate 1.27 times more return on investment than Newmont. However, American Public is 1.27 times more volatile than Newmont. It trades about 0.16 of its potential returns per unit of risk. Newmont is currently generating about 0.0 per unit of risk. If you would invest 1,230 in American Public Education on November 7, 2024 and sell it today you would earn a total of 870.00 from holding American Public Education or generate 70.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Public Education vs. Newmont
Performance |
| Timeline |
| American Public Education |
| Newmont |
American Public and Newmont Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Public and Newmont
The main advantage of trading using opposite American Public and Newmont positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Public position performs unexpectedly, Newmont 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 will offset losses from the drop in Newmont's long position.| American Public vs. CENTURIA OFFICE REIT | American Public vs. Aristocrat Leisure Limited | American Public vs. TRAVEL LEISURE DL 01 | American Public vs. Neinor Homes SA |
| Newmont vs. PSI Software AG | Newmont vs. Check Point Software | Newmont vs. VITEC SOFTWARE GROUP | Newmont vs. Unity Software |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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