Correlation Between Media and Newmont
Can any of the company-specific risk be diversified away by investing in both Media 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 Media and Newmont into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Media and Games and Newmont, you can compare the effects of market volatilities on Media 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 Media with a short position of Newmont. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media and Newmont.
Diversification Opportunities for Media and Newmont
Weak diversification
The 3 months correlation between Media and Newmont is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Media and Games and Newmont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont and Media 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 Media and Games 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 Media i.e., Media and Newmont go up and down completely randomly.
Pair Corralation between Media and Newmont
Assuming the 90 days trading horizon Media is expected to generate 1.06 times less return on investment than Newmont. In addition to that, Media is 2.37 times more volatile than Newmont. It trades about 0.12 of its total potential returns per unit of risk. Newmont is currently generating about 0.29 per unit of volatility. If you would invest 3,707 in Newmont on November 4, 2024 and sell it today you would earn a total of 413.00 from holding Newmont or generate 11.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Media and Games vs. Newmont
Performance |
| Timeline |
| Media and Games |
| Newmont |
Media and Newmont Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Media and Newmont
The main advantage of trading using opposite Media and Newmont positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media 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.| Media vs. AIR PRODCHEMICALS | Media vs. FAST RETAIL ADR | Media vs. Tencent Music Entertainment | Media vs. COSTCO WHOLESALE CDR |
| Newmont vs. CAIRN HOMES EO | Newmont vs. Transport International Holdings | Newmont vs. Urban Outfitters | Newmont vs. Neinor Homes SA |
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 Stocks Directory module to find actively traded stocks across global markets.
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