Correlation Between Lupatech and Newmont
Can any of the company-specific risk be diversified away by investing in both Lupatech 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 Lupatech and Newmont into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lupatech SA and Newmont, you can compare the effects of market volatilities on Lupatech 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 Lupatech with a short position of Newmont. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lupatech and Newmont.
Diversification Opportunities for Lupatech and Newmont
Very weak diversification
The 3 months correlation between Lupatech and Newmont is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Lupatech SA and Newmont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont and Lupatech 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 Lupatech SA 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 Lupatech i.e., Lupatech and Newmont go up and down completely randomly.
Pair Corralation between Lupatech and Newmont
Assuming the 90 days trading horizon Lupatech SA is expected to under-perform the Newmont. In addition to that, Lupatech is 1.51 times more volatile than Newmont. It trades about -0.04 of its total potential returns per unit of risk. Newmont is currently generating about 0.02 per unit of volatility. If you would invest 23,615 in Newmont on September 14, 2024 and sell it today you would earn a total of 1,645 from holding Newmont or generate 6.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.4% |
| Values | Daily Returns |
Lupatech SA vs. Newmont
Performance |
| Timeline |
| Lupatech SA |
| Newmont |
Lupatech and Newmont Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lupatech and Newmont
The main advantage of trading using opposite Lupatech and Newmont positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lupatech 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.| Lupatech vs. PDG Realty SA | Lupatech vs. Positivo Tecnologia SA | Lupatech vs. Rossi Residencial SA | Lupatech vs. Gafisa SA |
| Newmont vs. Paycom Software | Newmont vs. Lupatech SA | Newmont vs. Agilent Technologies | Newmont vs. Raytheon Technologies |
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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