Correlation Between NatWest Group and GoldMining
Can any of the company-specific risk be diversified away by investing in both NatWest Group and GoldMining 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 NatWest Group and GoldMining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NatWest Group PLC and GoldMining, you can compare the effects of market volatilities on NatWest Group and GoldMining 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 NatWest Group with a short position of GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of NatWest Group and GoldMining.
Diversification Opportunities for NatWest Group and GoldMining
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NatWest and GoldMining is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding NatWest Group PLC and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining and NatWest Group 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 NatWest Group PLC are associated (or correlated) with GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMining has no effect on the direction of NatWest Group i.e., NatWest Group and GoldMining go up and down completely randomly.
Pair Corralation between NatWest Group and GoldMining
Assuming the 90 days trading horizon NatWest Group PLC is expected to generate 0.47 times more return on investment than GoldMining. However, NatWest Group PLC is 2.13 times less risky than GoldMining. It trades about 0.09 of its potential returns per unit of risk. GoldMining is currently generating about -0.01 per unit of risk. If you would invest 23,059 in NatWest Group PLC on December 4, 2024 and sell it today you would earn a total of 23,231 from holding NatWest Group PLC or generate 100.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 39.36% |
| Values | Daily Returns |
NatWest Group PLC vs. GoldMining
Performance |
| Timeline |
| NatWest Group PLC |
| GoldMining |
NatWest Group and GoldMining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NatWest Group and GoldMining
The main advantage of trading using opposite NatWest Group and GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NatWest Group position performs unexpectedly, GoldMining 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 GoldMining will offset losses from the drop in GoldMining's long position.| NatWest Group vs. Zegona Communications Plc | NatWest Group vs. Zoom Video Communications | NatWest Group vs. Charter Communications Cl | NatWest Group vs. Auto Trader Group |
| GoldMining vs. New Residential Investment | GoldMining vs. Broadcom | GoldMining vs. JB Hunt Transport | GoldMining vs. Smithson Investment Trust |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |