Correlation Between Century Aluminum and Newmont Goldcorp
Can any of the company-specific risk be diversified away by investing in both Century Aluminum 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 Century Aluminum and Newmont Goldcorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Aluminum and Newmont Goldcorp Corp, you can compare the effects of market volatilities on Century Aluminum 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 Century Aluminum with a short position of Newmont Goldcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Aluminum and Newmont Goldcorp.
Diversification Opportunities for Century Aluminum and Newmont Goldcorp
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Century and Newmont is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Century Aluminum 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 Century Aluminum 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 Century Aluminum 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 Century Aluminum i.e., Century Aluminum and Newmont Goldcorp go up and down completely randomly.
Pair Corralation between Century Aluminum and Newmont Goldcorp
Given the investment horizon of 90 days Century Aluminum is expected to generate 1.38 times more return on investment than Newmont Goldcorp. However, Century Aluminum is 1.38 times more volatile than Newmont Goldcorp Corp. It trades about 0.29 of its potential returns per unit of risk. Newmont Goldcorp Corp is currently generating about -0.34 per unit of risk. If you would invest 1,682 in Century Aluminum on August 24, 2024 and sell it today you would earn a total of 580.00 from holding Century Aluminum or generate 34.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Century Aluminum vs. Newmont Goldcorp Corp
Performance |
| Timeline |
| Century Aluminum |
| Newmont Goldcorp Corp |
Century Aluminum and Newmont Goldcorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Aluminum and Newmont Goldcorp
The main advantage of trading using opposite Century Aluminum and Newmont Goldcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Aluminum 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.| Century Aluminum vs. Eshallgo Class A | Century Aluminum vs. Amtech Systems | Century Aluminum vs. Gold Fields Ltd | Century Aluminum vs. Aegean Airlines SA |
| Newmont Goldcorp vs. Gold Fields Ltd | Newmont Goldcorp vs. Barrick Gold Corp | Newmont Goldcorp vs. Pan American Silver | Newmont Goldcorp vs. Franco Nevada |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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