Correlation Between SPDR Gold and Newmont Goldcorp
Can any of the company-specific risk be diversified away by investing in both SPDR Gold 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 SPDR Gold and Newmont Goldcorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Gold Shares and Newmont Goldcorp Corp, you can compare the effects of market volatilities on SPDR Gold 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 SPDR Gold with a short position of Newmont Goldcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Gold and Newmont Goldcorp.
Diversification Opportunities for SPDR Gold and Newmont Goldcorp
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between SPDR and Newmont is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Gold Shares 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 SPDR Gold 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 SPDR Gold Shares 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 SPDR Gold i.e., SPDR Gold and Newmont Goldcorp go up and down completely randomly.
Pair Corralation between SPDR Gold and Newmont Goldcorp
Considering the 90-day investment horizon SPDR Gold Shares is expected to generate 0.61 times more return on investment than Newmont Goldcorp. However, SPDR Gold Shares is 1.65 times less risky than Newmont Goldcorp. It trades about -0.05 of its potential returns per unit of risk. Newmont Goldcorp Corp is currently generating about -0.24 per unit of risk. If you would invest 25,332 in SPDR Gold Shares on August 26, 2024 and sell it today you would lose (348.00) from holding SPDR Gold Shares or give up 1.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Gold Shares vs. Newmont Goldcorp Corp
Performance |
| Timeline |
| SPDR Gold Shares |
| Newmont Goldcorp Corp |
SPDR Gold and Newmont Goldcorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Gold and Newmont Goldcorp
The main advantage of trading using opposite SPDR Gold and Newmont Goldcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Gold 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.| SPDR Gold vs. iShares Silver Trust | SPDR Gold vs. VanEck Gold Miners | SPDR Gold vs. SPDR SP 500 | SPDR Gold vs. United States Oil |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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