Correlation Between Newmont Goldcorp and Constellium
Can any of the company-specific risk be diversified away by investing in both Newmont Goldcorp and Constellium 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 Constellium 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 Constellium Nv, you can compare the effects of market volatilities on Newmont Goldcorp and Constellium 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 Constellium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmont Goldcorp and Constellium.
Diversification Opportunities for Newmont Goldcorp and Constellium
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Newmont and Constellium is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Newmont Goldcorp Corp and Constellium Nv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Constellium Nv 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 Constellium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Constellium Nv has no effect on the direction of Newmont Goldcorp i.e., Newmont Goldcorp and Constellium go up and down completely randomly.
Pair Corralation between Newmont Goldcorp and Constellium
Considering the 90-day investment horizon Newmont Goldcorp Corp is expected to generate 0.6 times more return on investment than Constellium. However, Newmont Goldcorp Corp is 1.68 times less risky than Constellium. It trades about -0.05 of its potential returns per unit of risk. Constellium Nv is currently generating about -0.04 per unit of risk. If you would invest 4,709 in Newmont Goldcorp Corp on September 5, 2024 and sell it today you would lose (552.00) from holding Newmont Goldcorp Corp or give up 11.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newmont Goldcorp Corp vs. Constellium Nv
Performance |
| Timeline |
| Newmont Goldcorp Corp |
| Constellium Nv |
Newmont Goldcorp and Constellium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newmont Goldcorp and Constellium
The main advantage of trading using opposite Newmont Goldcorp and Constellium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmont Goldcorp position performs unexpectedly, Constellium 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 Constellium will offset losses from the drop in Constellium's long position.| Newmont Goldcorp vs. Constellium Nv | Newmont Goldcorp vs. Century Aluminum | Newmont Goldcorp vs. China Hongqiao Group | Newmont Goldcorp vs. Kaiser Aluminum |
| Constellium vs. Century Aluminum | Constellium vs. Alcoa Corp | Constellium vs. China Hongqiao Group | Constellium vs. Norsk Hydro ASA |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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