Correlation Between Newcrest Mining and Lumina Gold
Can any of the company-specific risk be diversified away by investing in both Newcrest Mining and Lumina 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 Lumina 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 Lumina Gold Corp, you can compare the effects of market volatilities on Newcrest Mining and Lumina 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 Lumina Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newcrest Mining and Lumina Gold.
Diversification Opportunities for Newcrest Mining and Lumina Gold
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Newcrest and Lumina is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Newcrest Mining and Lumina Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lumina 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 Lumina Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lumina Gold Corp has no effect on the direction of Newcrest Mining i.e., Newcrest Mining and Lumina Gold go up and down completely randomly.
Pair Corralation between Newcrest Mining and Lumina Gold
Assuming the 90 days horizon Newcrest Mining is expected to generate 0.61 times more return on investment than Lumina Gold. However, Newcrest Mining is 1.64 times less risky than Lumina Gold. It trades about 0.06 of its potential returns per unit of risk. Lumina Gold Corp is currently generating about 0.03 per unit of risk. If you would invest 1,526 in Newcrest Mining on September 3, 2024 and sell it today you would earn a total of 274.00 from holding Newcrest Mining or generate 17.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 28.0% |
| Values | Daily Returns |
Newcrest Mining vs. Lumina Gold Corp
Performance |
| Timeline |
| Newcrest Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Lumina Gold Corp |
Newcrest Mining and Lumina Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newcrest Mining and Lumina Gold
The main advantage of trading using opposite Newcrest Mining and Lumina Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newcrest Mining position performs unexpectedly, Lumina 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 Lumina Gold will offset losses from the drop in Lumina 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 |
| Lumina Gold vs. Harmony Gold Mining | Lumina Gold vs. SPACE | Lumina Gold vs. T Rowe Price | Lumina Gold vs. Ampleforth |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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