Correlation Between Newmont Goldcorp and Rackla Metals
Can any of the company-specific risk be diversified away by investing in both Newmont Goldcorp and Rackla Metals 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 Rackla Metals 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 Rackla Metals, you can compare the effects of market volatilities on Newmont Goldcorp and Rackla Metals 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 Rackla Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmont Goldcorp and Rackla Metals.
Diversification Opportunities for Newmont Goldcorp and Rackla Metals
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Newmont and Rackla is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Newmont Goldcorp Corp and Rackla Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rackla Metals 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 Rackla Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rackla Metals has no effect on the direction of Newmont Goldcorp i.e., Newmont Goldcorp and Rackla Metals go up and down completely randomly.
Pair Corralation between Newmont Goldcorp and Rackla Metals
Considering the 90-day investment horizon Newmont Goldcorp Corp is expected to under-perform the Rackla Metals. But the stock apears to be less risky and, when comparing its historical volatility, Newmont Goldcorp Corp is 5.53 times less risky than Rackla Metals. The stock trades about -0.29 of its potential returns per unit of risk. The Rackla Metals is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 5.30 in Rackla Metals on August 29, 2024 and sell it today you would earn a total of 1.50 from holding Rackla Metals or generate 28.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Newmont Goldcorp Corp vs. Rackla Metals
Performance |
| Timeline |
| Newmont Goldcorp Corp |
| Rackla Metals |
Newmont Goldcorp and Rackla Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newmont Goldcorp and Rackla Metals
The main advantage of trading using opposite Newmont Goldcorp and Rackla Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmont Goldcorp position performs unexpectedly, Rackla Metals 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 Rackla Metals will offset losses from the drop in Rackla Metals' 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 |
| Rackla Metals vs. TRU Precious Metals | Rackla Metals vs. North Peak Resources | Rackla Metals vs. Augusta Gold Corp | Rackla Metals vs. Nine Mile Metals |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |