Correlation Between Celanese and Newmont Goldcorp
Can any of the company-specific risk be diversified away by investing in both Celanese and Newmont Goldcorp 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 Celanese and Newmont Goldcorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celanese and Newmont Goldcorp Corp, you can compare the effects of market volatilities on Celanese and Newmont Goldcorp 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 Celanese with a short position of Newmont Goldcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celanese and Newmont Goldcorp.
Diversification Opportunities for Celanese and Newmont Goldcorp
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Celanese and Newmont is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Celanese and Newmont Goldcorp Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont Goldcorp Corp and Celanese 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 Celanese are associated (or correlated) with Newmont Goldcorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmont Goldcorp Corp has no effect on the direction of Celanese i.e., Celanese and Newmont Goldcorp go up and down completely randomly.
Pair Corralation between Celanese and Newmont Goldcorp
Allowing for the 90-day total investment horizon Celanese is expected to under-perform the Newmont Goldcorp. In addition to that, Celanese is 2.91 times more volatile than Newmont Goldcorp Corp. It trades about -0.38 of its total potential returns per unit of risk. Newmont Goldcorp Corp is currently generating about -0.29 per unit of volatility. If you would invest 4,836 in Newmont Goldcorp Corp on August 28, 2024 and sell it today you would lose (590.00) from holding Newmont Goldcorp Corp or give up 12.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Celanese vs. Newmont Goldcorp Corp
Performance |
| Timeline |
| Celanese |
| Newmont Goldcorp Corp |
Celanese and Newmont Goldcorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celanese and Newmont Goldcorp
The main advantage of trading using opposite Celanese and Newmont Goldcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celanese position performs unexpectedly, Newmont Goldcorp 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 Goldcorp will offset losses from the drop in Newmont Goldcorp's long position.| Celanese vs. Tronox Holdings PLC | Celanese vs. Green Plains Renewable | Celanese vs. Lsb Industries | Celanese vs. Valhi Inc |
| Newmont Goldcorp vs. Pan American Silver | Newmont Goldcorp vs. Agnico Eagle Mines | Newmont Goldcorp vs. Kinross Gold | Newmont Goldcorp vs. Wheaton Precious Metals |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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