Correlation Between New World and Newmont Goldcorp
Can any of the company-specific risk be diversified away by investing in both New World and Newmont Goldcorp 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 New World and Newmont Goldcorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New World Gold and Newmont Goldcorp Corp, you can compare the effects of market volatilities on New World and Newmont Goldcorp 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 New World with a short position of Newmont Goldcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of New World and Newmont Goldcorp.
Diversification Opportunities for New World and Newmont Goldcorp
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between New and Newmont is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding New World Gold and Newmont Goldcorp Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont Goldcorp Corp and New World 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 New World Gold are associated (or correlated) with Newmont Goldcorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmont Goldcorp Corp has no effect on the direction of New World i.e., New World and Newmont Goldcorp go up and down completely randomly.
Pair Corralation between New World and Newmont Goldcorp
Given the investment horizon of 90 days New World Gold is expected to generate 12.94 times more return on investment than Newmont Goldcorp. However, New World is 12.94 times more volatile than Newmont Goldcorp Corp. It trades about 0.1 of its potential returns per unit of risk. Newmont Goldcorp Corp is currently generating about -0.25 per unit of risk. If you would invest 0.01 in New World Gold on October 9, 2024 and sell it today you would earn a total of 0.00 from holding New World Gold or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
New World Gold vs. Newmont Goldcorp Corp
Performance |
| Timeline |
| New World Gold |
| Newmont Goldcorp Corp |
New World and Newmont Goldcorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New World and Newmont Goldcorp
The main advantage of trading using opposite New World and Newmont Goldcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New World position performs unexpectedly, Newmont Goldcorp 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 Newmont Goldcorp will offset losses from the drop in Newmont Goldcorp's long position.| New World vs. Gncc Capital | New World vs. American International Ventures | New World vs. Rackla Metals | New World vs. Allegiant Gold |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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