Correlation Between Alfa Financial and Newmont Corp
Can any of the company-specific risk be diversified away by investing in both Alfa Financial and Newmont Corp 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 Alfa Financial and Newmont Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Financial Software and Newmont Corp, you can compare the effects of market volatilities on Alfa Financial and Newmont Corp 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 Alfa Financial with a short position of Newmont Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and Newmont Corp.
Diversification Opportunities for Alfa Financial and Newmont Corp
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alfa and Newmont is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software and Newmont Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont Corp and Alfa Financial 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 Alfa Financial Software are associated (or correlated) with Newmont Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmont Corp has no effect on the direction of Alfa Financial i.e., Alfa Financial and Newmont Corp go up and down completely randomly.
Pair Corralation between Alfa Financial and Newmont Corp
Assuming the 90 days trading horizon Alfa Financial Software is expected to generate 0.88 times more return on investment than Newmont Corp. However, Alfa Financial Software is 1.14 times less risky than Newmont Corp. It trades about 0.08 of its potential returns per unit of risk. Newmont Corp is currently generating about 0.01 per unit of risk. If you would invest 13,503 in Alfa Financial Software on October 16, 2024 and sell it today you would earn a total of 6,747 from holding Alfa Financial Software or generate 49.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.51% |
| Values | Daily Returns |
Alfa Financial Software vs. Newmont Corp
Performance |
| Timeline |
| Alfa Financial Software |
| Newmont Corp |
Alfa Financial and Newmont Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Financial and Newmont Corp
The main advantage of trading using opposite Alfa Financial and Newmont Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Financial position performs unexpectedly, Newmont Corp 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 Corp will offset losses from the drop in Newmont Corp's long position.| Alfa Financial vs. Pfeiffer Vacuum Technology | Alfa Financial vs. DXC Technology Co | Alfa Financial vs. Supermarket Income REIT | Alfa Financial vs. International Biotechnology Trust |
| Newmont Corp vs. Concurrent Technologies Plc | Newmont Corp vs. Aptitude Software Group | Newmont Corp vs. Telecom Italia SpA | Newmont Corp vs. Spirent Communications 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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