Correlation Between Gold Fields and Newmont Goldcorp
Can any of the company-specific risk be diversified away by investing in both Gold Fields 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 Gold Fields and Newmont Goldcorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Fields Ltd and Newmont Goldcorp Corp, you can compare the effects of market volatilities on Gold Fields 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 Gold Fields with a short position of Newmont Goldcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Fields and Newmont Goldcorp.
Diversification Opportunities for Gold Fields and Newmont Goldcorp
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gold and Newmont is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd 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 Gold Fields 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 Gold Fields Ltd 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 Gold Fields i.e., Gold Fields and Newmont Goldcorp go up and down completely randomly.
Pair Corralation between Gold Fields and Newmont Goldcorp
Considering the 90-day investment horizon Gold Fields Ltd is expected to generate 1.34 times more return on investment than Newmont Goldcorp. However, Gold Fields is 1.34 times more volatile than Newmont Goldcorp Corp. It trades about 0.04 of its potential returns per unit of risk. Newmont Goldcorp Corp is currently generating about 0.01 per unit of risk. If you would invest 1,027 in Gold Fields Ltd on August 24, 2024 and sell it today you would earn a total of 480.00 from holding Gold Fields Ltd or generate 46.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Fields Ltd vs. Newmont Goldcorp Corp
Performance |
| Timeline |
| Gold Fields |
| Newmont Goldcorp Corp |
Gold Fields and Newmont Goldcorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Fields and Newmont Goldcorp
The main advantage of trading using opposite Gold Fields and Newmont Goldcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields 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.| Gold Fields vs. Agnico Eagle Mines | Gold Fields vs. Pan American Silver | Gold Fields vs. Kinross Gold | Gold Fields vs. B2Gold Corp |
| 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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