Correlation Between London Security and Newmont Corp
Can any of the company-specific risk be diversified away by investing in both London Security 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 London Security and Newmont Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between London Security Plc and Newmont Corp, you can compare the effects of market volatilities on London Security 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 London Security with a short position of Newmont Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of London Security and Newmont Corp.
Diversification Opportunities for London Security and Newmont Corp
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between London and Newmont is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding London Security Plc and Newmont Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont Corp and London Security 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 London Security Plc 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 London Security i.e., London Security and Newmont Corp go up and down completely randomly.
Pair Corralation between London Security and Newmont Corp
Assuming the 90 days trading horizon London Security Plc is expected to generate 0.59 times more return on investment than Newmont Corp. However, London Security Plc is 1.69 times less risky than Newmont Corp. It trades about 0.08 of its potential returns per unit of risk. Newmont Corp is currently generating about -0.02 per unit of risk. If you would invest 294,207 in London Security Plc on September 24, 2024 and sell it today you would earn a total of 45,793 from holding London Security Plc or generate 15.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.66% |
| Values | Daily Returns |
London Security Plc vs. Newmont Corp
Performance |
| Timeline |
| London Security Plc |
| Newmont Corp |
London Security and Newmont Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with London Security and Newmont Corp
The main advantage of trading using opposite London Security and Newmont Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if London Security 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.| London Security vs. Samsung Electronics Co | London Security vs. Samsung Electronics Co | London Security vs. Hyundai Motor | London Security vs. Toyota Motor Corp |
| 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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |