Correlation Between Friedman Industries and Newmont Goldcorp
Can any of the company-specific risk be diversified away by investing in both Friedman Industries 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 Friedman Industries and Newmont Goldcorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Friedman Industries and Newmont Goldcorp Corp, you can compare the effects of market volatilities on Friedman Industries 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 Friedman Industries with a short position of Newmont Goldcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Friedman Industries and Newmont Goldcorp.
Diversification Opportunities for Friedman Industries and Newmont Goldcorp
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Friedman and Newmont is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Friedman Industries 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 Friedman Industries 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 Friedman Industries 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 Friedman Industries i.e., Friedman Industries and Newmont Goldcorp go up and down completely randomly.
Pair Corralation between Friedman Industries and Newmont Goldcorp
Considering the 90-day investment horizon Friedman Industries is expected to generate 1.72 times more return on investment than Newmont Goldcorp. However, Friedman Industries is 1.72 times more volatile than Newmont Goldcorp Corp. It trades about 0.0 of its potential returns per unit of risk. Newmont Goldcorp Corp is currently generating about -0.03 per unit of risk. If you would invest 1,431 in Friedman Industries on November 1, 2024 and sell it today you would lose (35.00) from holding Friedman Industries or give up 2.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Friedman Industries vs. Newmont Goldcorp Corp
Performance |
| Timeline |
| Friedman Industries |
| Newmont Goldcorp Corp |
Friedman Industries and Newmont Goldcorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Friedman Industries and Newmont Goldcorp
The main advantage of trading using opposite Friedman Industries and Newmont Goldcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Friedman Industries 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.| Friedman Industries vs. ArcelorMittal SA | Friedman Industries vs. Aperam PK | Friedman Industries vs. Acerinox SA ADR | Friedman Industries vs. Algoma Steel Group |
| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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