Correlation Between Newmont and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both Newmont and Perseus 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 and Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newmont and Perseus Mining Limited, you can compare the effects of market volatilities on Newmont and Perseus 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 with a short position of Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmont and Perseus Mining.
Diversification Opportunities for Newmont and Perseus Mining
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Newmont and Perseus is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Newmont and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining 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 Perseus Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perseus Mining has no effect on the direction of Newmont i.e., Newmont and Perseus Mining go up and down completely randomly.
Pair Corralation between Newmont and Perseus Mining
Assuming the 90 days horizon Newmont is expected to generate 1.33 times more return on investment than Perseus Mining. However, Newmont is 1.33 times more volatile than Perseus Mining Limited. It trades about 0.04 of its potential returns per unit of risk. Perseus Mining Limited is currently generating about -0.13 per unit of risk. If you would invest 3,848 in Newmont on October 14, 2024 and sell it today you would earn a total of 36.00 from holding Newmont or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newmont vs. Perseus Mining Limited
Performance |
| Timeline |
| Newmont |
| Perseus Mining |
Newmont and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newmont and Perseus Mining
The main advantage of trading using opposite Newmont and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmont position performs unexpectedly, Perseus 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 Perseus Mining will offset losses from the drop in Perseus Mining's long position.| Newmont vs. The Home Depot | Newmont vs. Hisense Home Appliances | Newmont vs. alstria office REIT AG | Newmont vs. American Homes 4 |
| Perseus Mining vs. NORTHEAST UTILITIES | Perseus Mining vs. Khiron Life Sciences | Perseus Mining vs. United States Steel | Perseus Mining vs. KOBE STEEL LTD |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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