Correlation Between NAKED WINES and Newmont
Can any of the company-specific risk be diversified away by investing in both NAKED WINES 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 NAKED WINES and Newmont into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NAKED WINES PLC and Newmont, you can compare the effects of market volatilities on NAKED WINES 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 NAKED WINES with a short position of Newmont. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAKED WINES and Newmont.
Diversification Opportunities for NAKED WINES and Newmont
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NAKED and Newmont is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding NAKED WINES PLC and Newmont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont and NAKED WINES 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 NAKED WINES PLC 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 NAKED WINES i.e., NAKED WINES and Newmont go up and down completely randomly.
Pair Corralation between NAKED WINES and Newmont
Assuming the 90 days horizon NAKED WINES is expected to generate 1.18 times less return on investment than Newmont. In addition to that, NAKED WINES is 2.81 times more volatile than Newmont. It trades about 0.09 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NAKED WINES PLC vs. Newmont
Performance |
| Timeline |
| NAKED WINES PLC |
| Newmont |
NAKED WINES and Newmont Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAKED WINES and Newmont
The main advantage of trading using opposite NAKED WINES and Newmont positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAKED WINES 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.| NAKED WINES vs. Major Drilling Group | NAKED WINES vs. Easy Software AG | NAKED WINES vs. VELA TECHNOLPLC LS 0001 | NAKED WINES vs. BioNTech SE |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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