Correlation Between Newmont and MYFAIR GOLD
Can any of the company-specific risk be diversified away by investing in both Newmont and MYFAIR 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 and MYFAIR GOLD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newmont and MYFAIR GOLD P, you can compare the effects of market volatilities on Newmont and MYFAIR 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 with a short position of MYFAIR GOLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmont and MYFAIR GOLD.
Diversification Opportunities for Newmont and MYFAIR GOLD
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Newmont and MYFAIR is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Newmont and MYFAIR GOLD P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYFAIR GOLD P 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 MYFAIR GOLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MYFAIR GOLD P has no effect on the direction of Newmont i.e., Newmont and MYFAIR GOLD go up and down completely randomly.
Pair Corralation between Newmont and MYFAIR GOLD
Assuming the 90 days horizon Newmont is expected to generate 0.46 times more return on investment than MYFAIR GOLD. However, Newmont is 2.19 times less risky than MYFAIR GOLD. It trades about -0.23 of its potential returns per unit of risk. MYFAIR GOLD P is currently generating about -0.11 per unit of risk. If you would invest 3,948 in Newmont on September 26, 2024 and sell it today you would lose (349.00) from holding Newmont or give up 8.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newmont vs. MYFAIR GOLD P
Performance |
| Timeline |
| Newmont |
| MYFAIR GOLD P |
Newmont and MYFAIR GOLD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newmont and MYFAIR GOLD
The main advantage of trading using opposite Newmont and MYFAIR GOLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmont position performs unexpectedly, MYFAIR 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 MYFAIR GOLD will offset losses from the drop in MYFAIR GOLD's long position.| Newmont vs. ZIJIN MINH UNSPADR20 | Newmont vs. Barrick Gold | Newmont vs. Franco Nevada | Newmont vs. Agnico Eagle Mines |
| MYFAIR GOLD vs. ZIJIN MINH UNSPADR20 | MYFAIR GOLD vs. Newmont | MYFAIR GOLD vs. Barrick Gold | MYFAIR GOLD vs. Franco Nevada |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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