Correlation Between Golden Metal and Newmont Corp
Can any of the company-specific risk be diversified away by investing in both Golden Metal 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 Golden Metal and Newmont Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Metal Resources and Newmont Corp, you can compare the effects of market volatilities on Golden Metal 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 Golden Metal with a short position of Newmont Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Metal and Newmont Corp.
Diversification Opportunities for Golden Metal and Newmont Corp
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Golden and Newmont is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Golden Metal Resources and Newmont Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont Corp and Golden Metal 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 Golden Metal Resources 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 Golden Metal i.e., Golden Metal and Newmont Corp go up and down completely randomly.
Pair Corralation between Golden Metal and Newmont Corp
Assuming the 90 days trading horizon Golden Metal Resources is expected to generate 22.3 times more return on investment than Newmont Corp. However, Golden Metal is 22.3 times more volatile than Newmont Corp. It trades about 0.06 of its potential returns per unit of risk. Newmont Corp is currently generating about -0.01 per unit of risk. If you would invest 9.00 in Golden Metal Resources on September 24, 2024 and sell it today you would earn a total of 2,791 from holding Golden Metal Resources or generate 31011.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 84.55% |
| Values | Daily Returns |
Golden Metal Resources vs. Newmont Corp
Performance |
| Timeline |
| Golden Metal Resources |
| Newmont Corp |
Golden Metal and Newmont Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Metal and Newmont Corp
The main advantage of trading using opposite Golden Metal and Newmont Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Metal 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.| Golden Metal vs. Givaudan SA | Golden Metal vs. Antofagasta PLC | Golden Metal vs. Ferrexpo PLC | Golden Metal vs. Atalaya Mining |
| Newmont Corp vs. Uniper SE | Newmont Corp vs. Mulberry Group PLC | Newmont Corp vs. London Security Plc | Newmont Corp vs. Triad Group PLC |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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