Correlation Between Newmont Goldcorp and Optica Rare
Can any of the company-specific risk be diversified away by investing in both Newmont Goldcorp and Optica Rare 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 Optica Rare 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 Optica Rare Earths, you can compare the effects of market volatilities on Newmont Goldcorp and Optica Rare 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 Optica Rare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmont Goldcorp and Optica Rare.
Diversification Opportunities for Newmont Goldcorp and Optica Rare
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Newmont and Optica is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Newmont Goldcorp Corp and Optica Rare Earths in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optica Rare Earths 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 Optica Rare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optica Rare Earths has no effect on the direction of Newmont Goldcorp i.e., Newmont Goldcorp and Optica Rare go up and down completely randomly.
Pair Corralation between Newmont Goldcorp and Optica Rare
Considering the 90-day investment horizon Newmont Goldcorp Corp is expected to under-perform the Optica Rare. In addition to that, Newmont Goldcorp is 1.32 times more volatile than Optica Rare Earths. It trades about -0.12 of its total potential returns per unit of risk. Optica Rare Earths is currently generating about 0.1 per unit of volatility. If you would invest 1,614 in Optica Rare Earths on August 31, 2024 and sell it today you would earn a total of 191.00 from holding Optica Rare Earths or generate 11.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newmont Goldcorp Corp vs. Optica Rare Earths
Performance |
| Timeline |
| Newmont Goldcorp Corp |
| Optica Rare Earths |
Newmont Goldcorp and Optica Rare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newmont Goldcorp and Optica Rare
The main advantage of trading using opposite Newmont Goldcorp and Optica Rare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmont Goldcorp position performs unexpectedly, Optica Rare 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 Optica Rare will offset losses from the drop in Optica Rare'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 |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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