Correlation Between STRAYER EDUCATION and Newmont
Can any of the company-specific risk be diversified away by investing in both STRAYER EDUCATION and Newmont 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 STRAYER EDUCATION and Newmont into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRAYER EDUCATION and Newmont, you can compare the effects of market volatilities on STRAYER EDUCATION and Newmont 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 STRAYER EDUCATION with a short position of Newmont. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRAYER EDUCATION and Newmont.
Diversification Opportunities for STRAYER EDUCATION and Newmont
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between STRAYER and Newmont is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding STRAYER EDUCATION and Newmont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont and STRAYER EDUCATION 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 STRAYER EDUCATION are associated (or correlated) with Newmont. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmont has no effect on the direction of STRAYER EDUCATION i.e., STRAYER EDUCATION and Newmont go up and down completely randomly.
Pair Corralation between STRAYER EDUCATION and Newmont
Assuming the 90 days trading horizon STRAYER EDUCATION is expected to generate 2.27 times less return on investment than Newmont. But when comparing it to its historical volatility, STRAYER EDUCATION is 1.37 times less risky than Newmont. It trades about 0.23 of its potential returns per unit of risk. Newmont is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 3,660 in Newmont on November 7, 2024 and sell it today you would earn a total of 536.00 from holding Newmont or generate 14.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STRAYER EDUCATION vs. Newmont
Performance |
| Timeline |
| STRAYER EDUCATION |
| Newmont |
STRAYER EDUCATION and Newmont Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRAYER EDUCATION and Newmont
The main advantage of trading using opposite STRAYER EDUCATION and Newmont positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRAYER EDUCATION position performs unexpectedly, Newmont 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 will offset losses from the drop in Newmont's long position.| STRAYER EDUCATION vs. DELTA AIR LINES | STRAYER EDUCATION vs. Ryanair Holdings plc | STRAYER EDUCATION vs. Osisko Metals | STRAYER EDUCATION vs. Fortescue Metals Group |
| Newmont vs. PSI Software AG | Newmont vs. Check Point Software | Newmont vs. VITEC SOFTWARE GROUP | Newmont vs. Unity Software |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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