Correlation Between Newmont and CN MODERN
Can any of the company-specific risk be diversified away by investing in both Newmont and CN MODERN 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 and CN MODERN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newmont and CN MODERN DAIRY, you can compare the effects of market volatilities on Newmont and CN MODERN 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 with a short position of CN MODERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmont and CN MODERN.
Diversification Opportunities for Newmont and CN MODERN
Very good diversification
The 3 months correlation between Newmont and 07M is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Newmont and CN MODERN DAIRY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CN MODERN DAIRY and Newmont 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 are associated (or correlated) with CN MODERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CN MODERN DAIRY has no effect on the direction of Newmont i.e., Newmont and CN MODERN go up and down completely randomly.
Pair Corralation between Newmont and CN MODERN
Assuming the 90 days horizon Newmont is expected to generate 1.65 times less return on investment than CN MODERN. In addition to that, Newmont is 1.05 times more volatile than CN MODERN DAIRY. It trades about 0.02 of its total potential returns per unit of risk. CN MODERN DAIRY is currently generating about 0.04 per unit of volatility. If you would invest 7.83 in CN MODERN DAIRY on September 12, 2024 and sell it today you would earn a total of 1.92 from holding CN MODERN DAIRY or generate 24.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newmont vs. CN MODERN DAIRY
Performance |
| Timeline |
| Newmont |
| CN MODERN DAIRY |
Newmont and CN MODERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newmont and CN MODERN
The main advantage of trading using opposite Newmont and CN MODERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmont position performs unexpectedly, CN MODERN 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 CN MODERN will offset losses from the drop in CN MODERN's long position.| Newmont vs. CN MODERN DAIRY | Newmont vs. Associated British Foods | Newmont vs. INDOFOOD AGRI RES | Newmont vs. SHIN ETSU CHEMICAL |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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