Correlation Between Soma Gold and Newmont Goldcorp
Can any of the company-specific risk be diversified away by investing in both Soma Gold 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 Soma Gold and Newmont Goldcorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Soma Gold Corp and Newmont Goldcorp Corp, you can compare the effects of market volatilities on Soma Gold 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 Soma Gold with a short position of Newmont Goldcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Soma Gold and Newmont Goldcorp.
Diversification Opportunities for Soma Gold and Newmont Goldcorp
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Soma and Newmont is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Soma Gold Corp 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 Soma Gold 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 Soma Gold Corp 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 Soma Gold i.e., Soma Gold and Newmont Goldcorp go up and down completely randomly.
Pair Corralation between Soma Gold and Newmont Goldcorp
Assuming the 90 days horizon Soma Gold is expected to generate 27.62 times less return on investment than Newmont Goldcorp. In addition to that, Soma Gold is 1.34 times more volatile than Newmont Goldcorp Corp. It trades about 0.01 of its total potential returns per unit of risk. Newmont Goldcorp Corp is currently generating about 0.34 per unit of volatility. If you would invest 3,816 in Newmont Goldcorp Corp on October 24, 2024 and sell it today you would earn a total of 351.00 from holding Newmont Goldcorp Corp or generate 9.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 85.71% |
| Values | Daily Returns |
Soma Gold Corp vs. Newmont Goldcorp Corp
Performance |
| Timeline |
| Soma Gold Corp |
| Newmont Goldcorp Corp |
Soma Gold and Newmont Goldcorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Soma Gold and Newmont Goldcorp
The main advantage of trading using opposite Soma Gold and Newmont Goldcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Soma Gold 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.| Soma Gold vs. Minnova Corp | Soma Gold vs. Argo Gold | Soma Gold vs. Advance Gold Corp | Soma Gold vs. Blue Star 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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