Correlation Between Newcrest Mining and Rackla Metals
Can any of the company-specific risk be diversified away by investing in both Newcrest Mining and Rackla Metals 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 Rackla Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newcrest Mining and Rackla Metals, you can compare the effects of market volatilities on Newcrest Mining and Rackla Metals 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 Rackla Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newcrest Mining and Rackla Metals.
Diversification Opportunities for Newcrest Mining and Rackla Metals
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Newcrest and Rackla is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Newcrest Mining and Rackla Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rackla Metals 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 Rackla Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rackla Metals has no effect on the direction of Newcrest Mining i.e., Newcrest Mining and Rackla Metals go up and down completely randomly.
Pair Corralation between Newcrest Mining and Rackla Metals
If you would invest 5.30 in Rackla Metals on August 29, 2024 and sell it today you would earn a total of 1.50 from holding Rackla Metals or generate 28.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Newcrest Mining vs. Rackla Metals
Performance |
| Timeline |
| Newcrest Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Rackla Metals |
Newcrest Mining and Rackla Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newcrest Mining and Rackla Metals
The main advantage of trading using opposite Newcrest Mining and Rackla Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newcrest Mining position performs unexpectedly, Rackla Metals 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 Rackla Metals will offset losses from the drop in Rackla Metals' 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 |
| Rackla Metals vs. TRU Precious Metals | Rackla Metals vs. North Peak Resources | Rackla Metals vs. Augusta Gold Corp | Rackla Metals vs. Nine Mile Metals |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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