Correlation Between Newmont Goldcorp and United States
Can any of the company-specific risk be diversified away by investing in both Newmont Goldcorp and United States 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 United States 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 United States Steel, you can compare the effects of market volatilities on Newmont Goldcorp and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmont Goldcorp and United States.
Diversification Opportunities for Newmont Goldcorp and United States
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Newmont and United is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Newmont Goldcorp Corp and United States Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Steel has no effect on the direction of Newmont Goldcorp i.e., Newmont Goldcorp and United States go up and down completely randomly.
Pair Corralation between Newmont Goldcorp and United States
Considering the 90-day investment horizon Newmont Goldcorp is expected to generate 1.33 times less return on investment than United States. But when comparing it to its historical volatility, Newmont Goldcorp Corp is 1.41 times less risky than United States. It trades about 0.47 of its potential returns per unit of risk. United States Steel is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 3,278 in United States Steel on November 9, 2024 and sell it today you would earn a total of 649.00 from holding United States Steel or generate 19.8% 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. United States Steel
Performance |
| Timeline |
| Newmont Goldcorp Corp |
| United States Steel |
Newmont Goldcorp and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newmont Goldcorp and United States
The main advantage of trading using opposite Newmont Goldcorp and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmont Goldcorp position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' 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 |
| United States vs. Nucor Corp | United States vs. Steel Dynamics | United States vs. ArcelorMittal SA ADR | United States vs. Gerdau SA ADR |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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