Correlation Between Newmont Goldcorp and NeXGold Mining
Can any of the company-specific risk be diversified away by investing in both Newmont Goldcorp and NeXGold Mining 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 NeXGold Mining 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 NeXGold Mining Corp, you can compare the effects of market volatilities on Newmont Goldcorp and NeXGold Mining 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 NeXGold Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmont Goldcorp and NeXGold Mining.
Diversification Opportunities for Newmont Goldcorp and NeXGold Mining
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Newmont and NeXGold is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Newmont Goldcorp Corp and NeXGold Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeXGold Mining Corp 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 NeXGold Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeXGold Mining Corp has no effect on the direction of Newmont Goldcorp i.e., Newmont Goldcorp and NeXGold Mining go up and down completely randomly.
Pair Corralation between Newmont Goldcorp and NeXGold Mining
Assuming the 90 days trading horizon Newmont Goldcorp Corp is expected to generate 0.46 times more return on investment than NeXGold Mining. However, Newmont Goldcorp Corp is 2.16 times less risky than NeXGold Mining. It trades about 0.01 of its potential returns per unit of risk. NeXGold Mining Corp is currently generating about -0.01 per unit of risk. If you would invest 6,055 in Newmont Goldcorp Corp on September 2, 2024 and sell it today you would lose (164.00) from holding Newmont Goldcorp Corp or give up 2.71% 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. NeXGold Mining Corp
Performance |
| Timeline |
| Newmont Goldcorp Corp |
| NeXGold Mining Corp |
Newmont Goldcorp and NeXGold Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newmont Goldcorp and NeXGold Mining
The main advantage of trading using opposite Newmont Goldcorp and NeXGold Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmont Goldcorp position performs unexpectedly, NeXGold Mining 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 NeXGold Mining will offset losses from the drop in NeXGold Mining's long position.| Newmont Goldcorp vs. Wheaton Precious Metals | Newmont Goldcorp vs. Agnico Eagle Mines | Newmont Goldcorp vs. Pan American Silver | Newmont Goldcorp vs. Franco Nevada |
| NeXGold Mining vs. Royal Bank of | NeXGold Mining vs. Canso Credit Trust | NeXGold Mining vs. CI Financial Corp | NeXGold Mining vs. Olympia Financial 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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