Correlation Between Newcrest Mining and Providence Gold
Can any of the company-specific risk be diversified away by investing in both Newcrest Mining and Providence 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 Providence 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 Providence Gold Mines, you can compare the effects of market volatilities on Newcrest Mining and Providence 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 Providence Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newcrest Mining and Providence Gold.
Diversification Opportunities for Newcrest Mining and Providence Gold
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Newcrest and Providence is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Newcrest Mining and Providence Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Providence Gold Mines 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 Providence Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Providence Gold Mines has no effect on the direction of Newcrest Mining i.e., Newcrest Mining and Providence Gold go up and down completely randomly.
Pair Corralation between Newcrest Mining and Providence Gold
If you would invest 3.00 in Providence Gold Mines on September 2, 2024 and sell it today you would lose (0.75) from holding Providence Gold Mines or give up 25.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Newcrest Mining vs. Providence Gold Mines
Performance |
| Timeline |
| Newcrest Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Providence Gold Mines |
Newcrest Mining and Providence Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newcrest Mining and Providence Gold
The main advantage of trading using opposite Newcrest Mining and Providence Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newcrest Mining position performs unexpectedly, Providence 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 Providence Gold will offset losses from the drop in Providence Gold's long position.| Newcrest Mining vs. Big Ridge Gold | Newcrest Mining vs. Westhaven Gold Corp | Newcrest Mining vs. Satori Resources | Newcrest Mining vs. K92 Mining |
| Providence Gold vs. Rover Metals Corp | Providence Gold vs. Tristar Gold | Providence Gold vs. NV Gold | Providence Gold vs. Peloton Minerals |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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