Correlation Between Newcrest Mining and Roscan Gold
Can any of the company-specific risk be diversified away by investing in both Newcrest Mining and Roscan 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 Roscan 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 Roscan Gold Corp, you can compare the effects of market volatilities on Newcrest Mining and Roscan 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 Roscan Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newcrest Mining and Roscan Gold.
Diversification Opportunities for Newcrest Mining and Roscan Gold
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Newcrest and Roscan is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Newcrest Mining and Roscan Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roscan 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 Roscan Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roscan Gold Corp has no effect on the direction of Newcrest Mining i.e., Newcrest Mining and Roscan Gold go up and down completely randomly.
Pair Corralation between Newcrest Mining and Roscan Gold
If you would invest 8.90 in Roscan Gold Corp on August 25, 2024 and sell it today you would lose (3.25) from holding Roscan Gold Corp or give up 36.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.4% |
| Values | Daily Returns |
Newcrest Mining vs. Roscan Gold Corp
Performance |
| Timeline |
| Newcrest Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Roscan Gold Corp |
Newcrest Mining and Roscan Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newcrest Mining and Roscan Gold
The main advantage of trading using opposite Newcrest Mining and Roscan Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newcrest Mining position performs unexpectedly, Roscan 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 Roscan Gold will offset losses from the drop in Roscan 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 |
| Roscan Gold vs. Aurion Resources | Roscan Gold vs. Liberty Gold Corp | Roscan Gold vs. Rio2 Limited | Roscan Gold vs. Orezone Gold Corp |
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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