Correlation Between LOANDEPOT INC and Newmont
Can any of the company-specific risk be diversified away by investing in both LOANDEPOT INC 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 LOANDEPOT INC and Newmont into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LOANDEPOT INC A and Newmont, you can compare the effects of market volatilities on LOANDEPOT INC 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 LOANDEPOT INC with a short position of Newmont. Check out your portfolio center. Please also check ongoing floating volatility patterns of LOANDEPOT INC and Newmont.
Diversification Opportunities for LOANDEPOT INC and Newmont
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between LOANDEPOT and Newmont is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding LOANDEPOT INC A and Newmont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont and LOANDEPOT INC 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 LOANDEPOT INC A 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 LOANDEPOT INC i.e., LOANDEPOT INC and Newmont go up and down completely randomly.
Pair Corralation between LOANDEPOT INC and Newmont
Assuming the 90 days horizon LOANDEPOT INC A is expected to generate 2.24 times more return on investment than Newmont. However, LOANDEPOT INC is 2.24 times more volatile than Newmont. It trades about 0.03 of its potential returns per unit of risk. Newmont is currently generating about 0.01 per unit of risk. If you would invest 156.00 in LOANDEPOT INC A on October 13, 2024 and sell it today you would earn a total of 5.00 from holding LOANDEPOT INC A or generate 3.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LOANDEPOT INC A vs. Newmont
Performance |
| Timeline |
| LOANDEPOT INC A |
| Newmont |
LOANDEPOT INC and Newmont Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LOANDEPOT INC and Newmont
The main advantage of trading using opposite LOANDEPOT INC and Newmont positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LOANDEPOT INC 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.| LOANDEPOT INC vs. Japan Tobacco | LOANDEPOT INC vs. MAGNUM MINING EXP | LOANDEPOT INC vs. Zijin Mining Group | LOANDEPOT INC vs. SERI INDUSTRIAL EO |
| Newmont vs. LOANDEPOT INC A | Newmont vs. Grupo Carso SAB | Newmont vs. NH HOTEL GROUP | Newmont vs. United Rentals |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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