Correlation Between Newcrest Mining and Alkane Resources
Can any of the company-specific risk be diversified away by investing in both Newcrest Mining and Alkane Resources 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 Alkane Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newcrest Mining and Alkane Resources Limited, you can compare the effects of market volatilities on Newcrest Mining and Alkane Resources 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 Alkane Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newcrest Mining and Alkane Resources.
Diversification Opportunities for Newcrest Mining and Alkane Resources
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Newcrest and Alkane is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Newcrest Mining and Alkane Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkane Resources 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 Alkane Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkane Resources has no effect on the direction of Newcrest Mining i.e., Newcrest Mining and Alkane Resources go up and down completely randomly.
Pair Corralation between Newcrest Mining and Alkane Resources
Assuming the 90 days horizon Newcrest Mining is expected to generate 0.46 times more return on investment than Alkane Resources. However, Newcrest Mining is 2.16 times less risky than Alkane Resources. It trades about 0.09 of its potential returns per unit of risk. Alkane Resources Limited is currently generating about 0.01 per unit of risk. If you would invest 1,364 in Newcrest Mining on September 2, 2024 and sell it today you would earn a total of 441.00 from holding Newcrest Mining or generate 32.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.05% |
| Values | Daily Returns |
Newcrest Mining vs. Alkane Resources Limited
Performance |
| Timeline |
| Newcrest Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Alkane Resources |
Newcrest Mining and Alkane Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newcrest Mining and Alkane Resources
The main advantage of trading using opposite Newcrest Mining and Alkane Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newcrest Mining position performs unexpectedly, Alkane Resources 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 Alkane Resources will offset losses from the drop in Alkane Resources' long position.| Newcrest Mining vs. Big Ridge Gold | Newcrest Mining vs. Westhaven Gold Corp | Newcrest Mining vs. Satori Resources | Newcrest Mining vs. K92 Mining |
| Alkane Resources vs. Arafura Resources | Alkane Resources vs. Great Western Minerals | Alkane Resources vs. Greenland Minerals And | Alkane Resources vs. Ucore Rare 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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