Correlation Between Grand Canyon and Newmont
Can any of the company-specific risk be diversified away by investing in both Grand Canyon and Newmont 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 Grand Canyon and Newmont into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Canyon Education and Newmont, you can compare the effects of market volatilities on Grand Canyon 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 Grand Canyon with a short position of Newmont. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Canyon and Newmont.
Diversification Opportunities for Grand Canyon and Newmont
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grand and Newmont is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canyon Education and Newmont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont and Grand Canyon 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 Grand Canyon Education 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 has no effect on the direction of Grand Canyon i.e., Grand Canyon and Newmont go up and down completely randomly.
Pair Corralation between Grand Canyon and Newmont
Assuming the 90 days trading horizon Grand Canyon Education is expected to generate 0.85 times more return on investment than Newmont. However, Grand Canyon Education is 1.18 times less risky than Newmont. It trades about 0.12 of its potential returns per unit of risk. Newmont is currently generating about 0.0 per unit of risk. If you would invest 13,000 in Grand Canyon Education on November 7, 2024 and sell it today you would earn a total of 4,100 from holding Grand Canyon Education or generate 31.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Canyon Education vs. Newmont
Performance |
| Timeline |
| Grand Canyon Education |
| Newmont |
Grand Canyon and Newmont Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Canyon and Newmont
The main advantage of trading using opposite Grand Canyon and Newmont positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Canyon 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.| Grand Canyon vs. Apollo Medical Holdings | Grand Canyon vs. PEPTONIC MEDICAL | Grand Canyon vs. Meiko Electronics Co | Grand Canyon vs. Merit Medical Systems |
| Newmont vs. PSI Software AG | Newmont vs. Check Point Software | Newmont vs. VITEC SOFTWARE GROUP | Newmont vs. Unity Software |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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