Correlation Between Newmont Goldcorp and American Eagle
Can any of the company-specific risk be diversified away by investing in both Newmont Goldcorp and American Eagle 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 Goldcorp and American Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newmont Goldcorp Corp and American Eagle Gold, you can compare the effects of market volatilities on Newmont Goldcorp and American Eagle 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 Goldcorp with a short position of American Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmont Goldcorp and American Eagle.
Diversification Opportunities for Newmont Goldcorp and American Eagle
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Newmont and American is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Newmont Goldcorp Corp and American Eagle Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Eagle Gold and Newmont Goldcorp 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 Goldcorp Corp are associated (or correlated) with American Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Eagle Gold has no effect on the direction of Newmont Goldcorp i.e., Newmont Goldcorp and American Eagle go up and down completely randomly.
Pair Corralation between Newmont Goldcorp and American Eagle
Considering the 90-day investment horizon Newmont Goldcorp Corp is expected to under-perform the American Eagle. But the stock apears to be less risky and, when comparing its historical volatility, Newmont Goldcorp Corp is 3.25 times less risky than American Eagle. The stock trades about -0.17 of its potential returns per unit of risk. The American Eagle Gold is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 50.00 in American Eagle Gold on September 1, 2024 and sell it today you would earn a total of 17.00 from holding American Eagle Gold or generate 34.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newmont Goldcorp Corp vs. American Eagle Gold
Performance |
| Timeline |
| Newmont Goldcorp Corp |
| American Eagle Gold |
Newmont Goldcorp and American Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newmont Goldcorp and American Eagle
The main advantage of trading using opposite Newmont Goldcorp and American Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmont Goldcorp position performs unexpectedly, American Eagle 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 American Eagle will offset losses from the drop in American Eagle's long position.| Newmont Goldcorp vs. Pan American Silver | Newmont Goldcorp vs. Agnico Eagle Mines | Newmont Goldcorp vs. Kinross Gold | Newmont Goldcorp vs. Wheaton Precious Metals |
| American Eagle vs. Minnova Corp | American Eagle vs. Blue Star Gold | American Eagle vs. Advance Gold Corp | American Eagle vs. Argo Gold |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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