Correlation Between US Global and Newmont Goldcorp
Can any of the company-specific risk be diversified away by investing in both US Global 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 US Global and Newmont Goldcorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Global GO and Newmont Goldcorp Corp, you can compare the effects of market volatilities on US Global 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 US Global with a short position of Newmont Goldcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Global and Newmont Goldcorp.
Diversification Opportunities for US Global and Newmont Goldcorp
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GOAU and Newmont is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding US Global GO 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 US Global 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 US Global GO 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 US Global i.e., US Global and Newmont Goldcorp go up and down completely randomly.
Pair Corralation between US Global and Newmont Goldcorp
Given the investment horizon of 90 days US Global GO is expected to generate 0.88 times more return on investment than Newmont Goldcorp. However, US Global GO is 1.14 times less risky than Newmont Goldcorp. It trades about 0.03 of its potential returns per unit of risk. Newmont Goldcorp Corp is currently generating about 0.02 per unit of risk. If you would invest 1,779 in US Global GO on August 31, 2024 and sell it today you would earn a total of 322.00 from holding US Global GO or generate 18.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
US Global GO vs. Newmont Goldcorp Corp
Performance |
| Timeline |
| US Global GO |
| Newmont Goldcorp Corp |
US Global and Newmont Goldcorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Global and Newmont Goldcorp
The main advantage of trading using opposite US Global and Newmont Goldcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Global 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.| US Global vs. Sprott Gold Miners | US Global vs. Global X Gold | US Global vs. Sprott Junior Gold | US Global vs. Amplify ETF Trust |
| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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