Correlation Between Newmont Goldcorp and Worthington Steel
Can any of the company-specific risk be diversified away by investing in both Newmont Goldcorp and Worthington Steel 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 Worthington Steel 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 Worthington Steel, you can compare the effects of market volatilities on Newmont Goldcorp and Worthington Steel 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 Worthington Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmont Goldcorp and Worthington Steel.
Diversification Opportunities for Newmont Goldcorp and Worthington Steel
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Newmont and Worthington is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Newmont Goldcorp Corp and Worthington Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worthington Steel 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 Worthington Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worthington Steel has no effect on the direction of Newmont Goldcorp i.e., Newmont Goldcorp and Worthington Steel go up and down completely randomly.
Pair Corralation between Newmont Goldcorp and Worthington Steel
Considering the 90-day investment horizon Newmont Goldcorp is expected to generate 5.37 times less return on investment than Worthington Steel. But when comparing it to its historical volatility, Newmont Goldcorp Corp is 1.41 times less risky than Worthington Steel. It trades about 0.02 of its potential returns per unit of risk. Worthington Steel is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,366 in Worthington Steel on August 26, 2024 and sell it today you would earn a total of 1,148 from holding Worthington Steel or generate 34.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newmont Goldcorp Corp vs. Worthington Steel
Performance |
| Timeline |
| Newmont Goldcorp Corp |
| Worthington Steel |
Newmont Goldcorp and Worthington Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newmont Goldcorp and Worthington Steel
The main advantage of trading using opposite Newmont Goldcorp and Worthington Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmont Goldcorp position performs unexpectedly, Worthington Steel 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 Worthington Steel will offset losses from the drop in Worthington Steel'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 |
| Worthington Steel vs. Everus Construction Group | Worthington Steel vs. SkyWest | Worthington Steel vs. Warner Music Group | Worthington Steel vs. Mesa Air Group |
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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