Correlation Between Hongli Group and Newmont Goldcorp
Can any of the company-specific risk be diversified away by investing in both Hongli Group 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 Hongli Group and Newmont Goldcorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hongli Group Ordinary and Newmont Goldcorp Corp, you can compare the effects of market volatilities on Hongli Group 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 Hongli Group with a short position of Newmont Goldcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hongli Group and Newmont Goldcorp.
Diversification Opportunities for Hongli Group and Newmont Goldcorp
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hongli and Newmont is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Hongli Group Ordinary 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 Hongli Group 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 Hongli Group Ordinary 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 Hongli Group i.e., Hongli Group and Newmont Goldcorp go up and down completely randomly.
Pair Corralation between Hongli Group and Newmont Goldcorp
Considering the 90-day investment horizon Hongli Group Ordinary is expected to generate 2.43 times more return on investment than Newmont Goldcorp. However, Hongli Group is 2.43 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 -0.03 per unit of risk. If you would invest 128.00 in Hongli Group Ordinary on November 1, 2024 and sell it today you would earn a total of 8.00 from holding Hongli Group Ordinary or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hongli Group Ordinary vs. Newmont Goldcorp Corp
Performance |
| Timeline |
| Hongli Group Ordinary |
| Newmont Goldcorp Corp |
Hongli Group and Newmont Goldcorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hongli Group and Newmont Goldcorp
The main advantage of trading using opposite Hongli Group and Newmont Goldcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hongli Group 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.| Hongli Group vs. Noble plc | Hongli Group vs. Sable Offshore Corp | Hongli Group vs. Delek Drilling | Hongli Group vs. AKITA Drilling |
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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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