Correlation Between Newcrest Mining and Gold Reserve
Can any of the company-specific risk be diversified away by investing in both Newcrest Mining and Gold Reserve 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 Newcrest Mining and Gold Reserve into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newcrest Mining and Gold Reserve, you can compare the effects of market volatilities on Newcrest Mining and Gold Reserve 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 Newcrest Mining with a short position of Gold Reserve. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newcrest Mining and Gold Reserve.
Diversification Opportunities for Newcrest Mining and Gold Reserve
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Newcrest and Gold is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Newcrest Mining and Gold Reserve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Reserve and Newcrest 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 Newcrest Mining are associated (or correlated) with Gold Reserve. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Reserve has no effect on the direction of Newcrest Mining i.e., Newcrest Mining and Gold Reserve go up and down completely randomly.
Pair Corralation between Newcrest Mining and Gold Reserve
If you would invest 1,800 in Newcrest Mining on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Newcrest Mining or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Newcrest Mining vs. Gold Reserve
Performance |
| Timeline |
| Newcrest Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Gold Reserve |
Newcrest Mining and Gold Reserve Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newcrest Mining and Gold Reserve
The main advantage of trading using opposite Newcrest Mining and Gold Reserve positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newcrest Mining position performs unexpectedly, Gold Reserve 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 Gold Reserve will offset losses from the drop in Gold Reserve's long position.| Newcrest Mining vs. Wesdome Gold Mines | Newcrest Mining vs. Gold Reserve | Newcrest Mining vs. Osisko Gold Ro | Newcrest Mining vs. I 80 Gold Corp |
| Gold Reserve vs. South32 Limited | Gold Reserve vs. NioCorp Developments Ltd | Gold Reserve vs. HUMANA INC | Gold Reserve vs. SCOR PK |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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