Correlation Between Newcrest Mining and Liberty Gold
Can any of the company-specific risk be diversified away by investing in both Newcrest Mining and Liberty Gold 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 Liberty Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newcrest Mining and Liberty Gold Corp, you can compare the effects of market volatilities on Newcrest Mining and Liberty Gold 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 Liberty Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newcrest Mining and Liberty Gold.
Diversification Opportunities for Newcrest Mining and Liberty Gold
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Newcrest and Liberty is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Newcrest Mining and Liberty Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Gold Corp 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 Liberty Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Gold Corp has no effect on the direction of Newcrest Mining i.e., Newcrest Mining and Liberty Gold go up and down completely randomly.
Pair Corralation between Newcrest Mining and Liberty Gold
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 | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Newcrest Mining vs. Liberty Gold Corp
Performance |
| Timeline |
| Newcrest Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Liberty Gold Corp |
Newcrest Mining and Liberty Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newcrest Mining and Liberty Gold
The main advantage of trading using opposite Newcrest Mining and Liberty Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newcrest Mining position performs unexpectedly, Liberty Gold 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 Liberty Gold will offset losses from the drop in Liberty Gold'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 |
| Liberty Gold vs. Rio2 Limited | Liberty Gold vs. Aurion Resources | Liberty Gold vs. Norsemont Mining | Liberty Gold vs. Minaurum Gold |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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