Correlation Between NEWMONT PORATION and Macquarie Bank
Can any of the company-specific risk be diversified away by investing in both NEWMONT PORATION and Macquarie Bank 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 NEWMONT PORATION and Macquarie Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEWMONT PORATION CDI and Macquarie Bank Limited, you can compare the effects of market volatilities on NEWMONT PORATION and Macquarie Bank 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 NEWMONT PORATION with a short position of Macquarie Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEWMONT PORATION and Macquarie Bank.
Diversification Opportunities for NEWMONT PORATION and Macquarie Bank
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NEWMONT and Macquarie is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding NEWMONT PORATION CDI and Macquarie Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Bank and NEWMONT PORATION 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 NEWMONT PORATION CDI are associated (or correlated) with Macquarie Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Bank has no effect on the direction of NEWMONT PORATION i.e., NEWMONT PORATION and Macquarie Bank go up and down completely randomly.
Pair Corralation between NEWMONT PORATION and Macquarie Bank
Assuming the 90 days trading horizon NEWMONT PORATION CDI is expected to generate 5.63 times more return on investment than Macquarie Bank. However, NEWMONT PORATION is 5.63 times more volatile than Macquarie Bank Limited. It trades about 0.03 of its potential returns per unit of risk. Macquarie Bank Limited is currently generating about 0.08 per unit of risk. If you would invest 6,012 in NEWMONT PORATION CDI on August 25, 2024 and sell it today you would earn a total of 656.00 from holding NEWMONT PORATION CDI or generate 10.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEWMONT PORATION CDI vs. Macquarie Bank Limited
Performance |
| Timeline |
| NEWMONT PORATION CDI |
| Macquarie Bank |
NEWMONT PORATION and Macquarie Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEWMONT PORATION and Macquarie Bank
The main advantage of trading using opposite NEWMONT PORATION and Macquarie Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEWMONT PORATION position performs unexpectedly, Macquarie Bank 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 Macquarie Bank will offset losses from the drop in Macquarie Bank's long position.| NEWMONT PORATION vs. Australian United Investment | NEWMONT PORATION vs. Super Retail Group | NEWMONT PORATION vs. Clime Investment Management | NEWMONT PORATION vs. Charter Hall Retail |
| Macquarie Bank vs. NEWMONT PORATION CDI | Macquarie Bank vs. Ssr Mining | Macquarie Bank vs. Ora Banda Mining | Macquarie Bank vs. Black Cat Syndicate |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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