Correlation Between Lion One and Newmont
Can any of the company-specific risk be diversified away by investing in both Lion One 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 Lion One and Newmont into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and Newmont, you can compare the effects of market volatilities on Lion One 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 Lion One with a short position of Newmont. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Newmont.
Diversification Opportunities for Lion One and Newmont
Poor diversification
The 3 months correlation between Lion and Newmont is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Newmont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont and Lion One 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 Lion One Metals 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 Lion One i.e., Lion One and Newmont go up and down completely randomly.
Pair Corralation between Lion One and Newmont
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Newmont. In addition to that, Lion One is 2.0 times more volatile than Newmont. It trades about -0.07 of its total potential returns per unit of risk. Newmont is currently generating about 0.03 per unit of volatility. If you would invest 3,717 in Newmont on September 14, 2024 and sell it today you would earn a total of 348.00 from holding Newmont or generate 9.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. Newmont
Performance |
| Timeline |
| Lion One Metals |
| Newmont |
Lion One and Newmont Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Newmont
The main advantage of trading using opposite Lion One and Newmont positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One 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.| Lion One vs. Franco Nevada | Lion One vs. Superior Plus Corp | Lion One vs. SIVERS SEMICONDUCTORS AB | Lion One vs. Norsk Hydro ASA |
| Newmont vs. GFL ENVIRONM | Newmont vs. Khiron Life Sciences | Newmont vs. CosmoSteel Holdings Limited | Newmont vs. Tianjin Capital Environmental |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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