Correlation Between Excelsior Mining and Newmont Goldcorp
Can any of the company-specific risk be diversified away by investing in both Excelsior Mining and Newmont Goldcorp 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 Excelsior Mining and Newmont Goldcorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Excelsior Mining Corp and Newmont Goldcorp Corp, you can compare the effects of market volatilities on Excelsior Mining and Newmont Goldcorp 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 Excelsior Mining with a short position of Newmont Goldcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Excelsior Mining and Newmont Goldcorp.
Diversification Opportunities for Excelsior Mining and Newmont Goldcorp
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Excelsior and Newmont is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Excelsior Mining Corp and Newmont Goldcorp Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont Goldcorp Corp and Excelsior Mining 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 Excelsior Mining Corp are associated (or correlated) with Newmont Goldcorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmont Goldcorp Corp has no effect on the direction of Excelsior Mining i.e., Excelsior Mining and Newmont Goldcorp go up and down completely randomly.
Pair Corralation between Excelsior Mining and Newmont Goldcorp
Assuming the 90 days trading horizon Excelsior Mining Corp is expected to generate 2.88 times more return on investment than Newmont Goldcorp. However, Excelsior Mining is 2.88 times more volatile than Newmont Goldcorp Corp. It trades about 0.02 of its potential returns per unit of risk. Newmont Goldcorp Corp is currently generating about -0.01 per unit of risk. If you would invest 25.00 in Excelsior Mining Corp on October 9, 2024 and sell it today you would lose (5.00) from holding Excelsior Mining Corp or give up 20.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Excelsior Mining Corp vs. Newmont Goldcorp Corp
Performance |
| Timeline |
| Excelsior Mining Corp |
| Newmont Goldcorp Corp |
Excelsior Mining and Newmont Goldcorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Excelsior Mining and Newmont Goldcorp
The main advantage of trading using opposite Excelsior Mining and Newmont Goldcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Excelsior Mining position performs unexpectedly, Newmont Goldcorp 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 Goldcorp will offset losses from the drop in Newmont Goldcorp's long position.| Excelsior Mining vs. RTG Mining | Excelsior Mining vs. Nubian Resources | Excelsior Mining vs. Fremont Gold | Excelsior Mining vs. Royal Road Minerals |
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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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