Correlation Between Newmont Goldcorp and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Newmont Goldcorp and Harmony 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 Newmont Goldcorp and Harmony Gold 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 Harmony Gold Mining, you can compare the effects of market volatilities on Newmont Goldcorp and Harmony 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 Newmont Goldcorp with a short position of Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmont Goldcorp and Harmony Gold.
Diversification Opportunities for Newmont Goldcorp and Harmony Gold
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Newmont and Harmony is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Newmont Goldcorp Corp and Harmony Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmony Gold Mining 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 Harmony Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmony Gold Mining has no effect on the direction of Newmont Goldcorp i.e., Newmont Goldcorp and Harmony Gold go up and down completely randomly.
Pair Corralation between Newmont Goldcorp and Harmony Gold
Considering the 90-day investment horizon Newmont Goldcorp Corp is expected to under-perform the Harmony Gold. But the stock apears to be less risky and, when comparing its historical volatility, Newmont Goldcorp Corp is 1.54 times less risky than Harmony Gold. The stock trades about 0.0 of its potential returns per unit of risk. The Harmony Gold Mining is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 344.00 in Harmony Gold Mining on October 20, 2024 and sell it today you would earn a total of 633.00 from holding Harmony Gold Mining or generate 184.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newmont Goldcorp Corp vs. Harmony Gold Mining
Performance |
| Timeline |
| Newmont Goldcorp Corp |
| Harmony Gold Mining |
Newmont Goldcorp and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newmont Goldcorp and Harmony Gold
The main advantage of trading using opposite Newmont Goldcorp and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmont Goldcorp position performs unexpectedly, Harmony 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 Harmony Gold will offset losses from the drop in Harmony Gold'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 |
| Harmony Gold vs. AngloGold Ashanti plc | Harmony Gold vs. Eldorado Gold Corp | Harmony Gold vs. Kinross Gold | Harmony Gold vs. Pan American Silver |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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