Correlation Between Optima Health and Newmont Corp
Can any of the company-specific risk be diversified away by investing in both Optima Health and Newmont Corp 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 Optima Health and Newmont Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optima Health plc and Newmont Corp, you can compare the effects of market volatilities on Optima Health and Newmont Corp 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 Optima Health with a short position of Newmont Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Health and Newmont Corp.
Diversification Opportunities for Optima Health and Newmont Corp
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Optima and Newmont is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Optima Health plc and Newmont Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont Corp and Optima Health 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 Optima Health plc are associated (or correlated) with Newmont Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmont Corp has no effect on the direction of Optima Health i.e., Optima Health and Newmont Corp go up and down completely randomly.
Pair Corralation between Optima Health and Newmont Corp
Assuming the 90 days trading horizon Optima Health plc is expected to under-perform the Newmont Corp. But the stock apears to be less risky and, when comparing its historical volatility, Optima Health plc is 2.29 times less risky than Newmont Corp. The stock trades about -0.64 of its potential returns per unit of risk. The Newmont Corp is currently generating about -0.19 of returns per unit of risk over similar time horizon. If you would invest 4,228 in Newmont Corp on October 12, 2024 and sell it today you would lose (318.00) from holding Newmont Corp or give up 7.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Optima Health plc vs. Newmont Corp
Performance |
| Timeline |
| Optima Health plc |
| Newmont Corp |
Optima Health and Newmont Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optima Health and Newmont Corp
The main advantage of trading using opposite Optima Health and Newmont Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optima Health position performs unexpectedly, Newmont Corp 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 Corp will offset losses from the drop in Newmont Corp's long position.| Optima Health vs. Toyota Motor Corp | Optima Health vs. OTP Bank Nyrt | Optima Health vs. Newmont Corp | Optima Health vs. ONEOK Inc |
| Newmont Corp vs. Eco Animal Health | Newmont Corp vs. Centaur Media | Newmont Corp vs. Optima Health plc | Newmont Corp vs. Universal Health Services |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |