Correlation Between Dow Jones and NEWMONT
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By analyzing existing cross correlation between Dow Jones Industrial and NEWMONT MNG P, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of NEWMONT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and NEWMONT.
Diversification Opportunities for Dow Jones and NEWMONT
Excellent diversification
The 3 months correlation between Dow and NEWMONT is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and NEWMONT MNG P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEWMONT MNG P and Dow Jones 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 Dow Jones Industrial 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 MNG P has no effect on the direction of Dow Jones i.e., Dow Jones and NEWMONT go up and down completely randomly.
Pair Corralation between Dow Jones and NEWMONT
Assuming the 90 days trading horizon Dow Jones is expected to generate 36.45 times less return on investment than NEWMONT. But when comparing it to its historical volatility, Dow Jones Industrial is 68.0 times less risky than NEWMONT. It trades about 0.08 of its potential returns per unit of risk. NEWMONT MNG P is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 10,897 in NEWMONT MNG P on September 2, 2024 and sell it today you would lose (187.00) from holding NEWMONT MNG P or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 84.88% |
| Values | Daily Returns |
Dow Jones Industrial vs. NEWMONT MNG P
Performance |
| Timeline |
Dow Jones and NEWMONT Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
NEWMONT MNG P
Pair trading matchups for NEWMONT
Pair Trading with Dow Jones and NEWMONT
The main advantage of trading using opposite Dow Jones and NEWMONT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
| NEWMONT vs. AEP TEX INC | NEWMONT vs. US BANK NATIONAL | NEWMONT vs. Netflix | NEWMONT vs. Empire State Realty |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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