Correlation Between EJF Investments and Newmont Corp
Can any of the company-specific risk be diversified away by investing in both EJF Investments 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 EJF Investments and Newmont Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EJF Investments and Newmont Corp, you can compare the effects of market volatilities on EJF Investments 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 EJF Investments with a short position of Newmont Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of EJF Investments and Newmont Corp.
Diversification Opportunities for EJF Investments and Newmont Corp
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EJF and Newmont is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding EJF Investments and Newmont Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont Corp and EJF Investments 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 EJF Investments 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 EJF Investments i.e., EJF Investments and Newmont Corp go up and down completely randomly.
Pair Corralation between EJF Investments and Newmont Corp
Assuming the 90 days trading horizon EJF Investments is expected to under-perform the Newmont Corp. But the stock apears to be less risky and, when comparing its historical volatility, EJF Investments is 1.49 times less risky than Newmont Corp. The stock trades about 0.0 of its potential returns per unit of risk. The Newmont Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 4,446 in Newmont Corp on October 27, 2024 and sell it today you would lose (212.00) from holding Newmont Corp or give up 4.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
EJF Investments vs. Newmont Corp
Performance |
| Timeline |
| EJF Investments |
| Newmont Corp |
EJF Investments and Newmont Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EJF Investments and Newmont Corp
The main advantage of trading using opposite EJF Investments and Newmont Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EJF Investments 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.| EJF Investments vs. Gaztransport et Technigaz | EJF Investments vs. Ebro Foods | EJF Investments vs. Roebuck Food Group | EJF Investments vs. Gruppo MutuiOnline SpA |
| Newmont Corp vs. Sabien Technology Group | Newmont Corp vs. Spirent Communications plc | Newmont Corp vs. Zurich Insurance Group | Newmont Corp vs. Mobile Tornado Group |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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