Correlation Between Newmont Goldcorp and Sprott Gold
Can any of the company-specific risk be diversified away by investing in both Newmont Goldcorp and Sprott 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 Sprott 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 Sprott Gold Miners, you can compare the effects of market volatilities on Newmont Goldcorp and Sprott 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 Sprott Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmont Goldcorp and Sprott Gold.
Diversification Opportunities for Newmont Goldcorp and Sprott Gold
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Newmont and Sprott is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Newmont Goldcorp Corp and Sprott Gold Miners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Gold Miners 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 Sprott Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Gold Miners has no effect on the direction of Newmont Goldcorp i.e., Newmont Goldcorp and Sprott Gold go up and down completely randomly.
Pair Corralation between Newmont Goldcorp and Sprott Gold
Considering the 90-day investment horizon Newmont Goldcorp Corp is expected to under-perform the Sprott Gold. In addition to that, Newmont Goldcorp is 1.09 times more volatile than Sprott Gold Miners. It trades about -0.24 of its total potential returns per unit of risk. Sprott Gold Miners is currently generating about -0.15 per unit of volatility. If you would invest 3,232 in Sprott Gold Miners on August 26, 2024 and sell it today you would lose (202.00) from holding Sprott Gold Miners or give up 6.25% 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. Sprott Gold Miners
Performance |
| Timeline |
| Newmont Goldcorp Corp |
| Sprott Gold Miners |
Newmont Goldcorp and Sprott Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newmont Goldcorp and Sprott Gold
The main advantage of trading using opposite Newmont Goldcorp and Sprott Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmont Goldcorp position performs unexpectedly, Sprott 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 Sprott Gold will offset losses from the drop in Sprott 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 |
| Sprott Gold vs. iShares Silver Trust | Sprott Gold vs. SPDR Gold Shares | Sprott Gold vs. Newmont Goldcorp Corp | Sprott Gold vs. Direxion Daily 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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