Correlation Between Universal Stainless and Newmont Goldcorp
Can any of the company-specific risk be diversified away by investing in both Universal Stainless 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 Universal Stainless and Newmont Goldcorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Stainless Alloy and Newmont Goldcorp Corp, you can compare the effects of market volatilities on Universal Stainless 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 Universal Stainless with a short position of Newmont Goldcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Stainless and Newmont Goldcorp.
Diversification Opportunities for Universal Stainless and Newmont Goldcorp
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Universal and Newmont is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Universal Stainless Alloy 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 Universal Stainless 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 Universal Stainless Alloy 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 Universal Stainless i.e., Universal Stainless and Newmont Goldcorp go up and down completely randomly.
Pair Corralation between Universal Stainless and Newmont Goldcorp
Given the investment horizon of 90 days Universal Stainless Alloy is expected to generate 0.19 times more return on investment than Newmont Goldcorp. However, Universal Stainless Alloy is 5.27 times less risky than Newmont Goldcorp. It trades about 0.19 of its potential returns per unit of risk. Newmont Goldcorp Corp is currently generating about -0.29 per unit of risk. If you would invest 4,364 in Universal Stainless Alloy on August 28, 2024 and sell it today you would earn a total of 70.00 from holding Universal Stainless Alloy or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Stainless Alloy vs. Newmont Goldcorp Corp
Performance |
| Timeline |
| Universal Stainless Alloy |
| Newmont Goldcorp Corp |
Universal Stainless and Newmont Goldcorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Stainless and Newmont Goldcorp
The main advantage of trading using opposite Universal Stainless and Newmont Goldcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Stainless 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.| Universal Stainless vs. Olympic Steel | Universal Stainless vs. Outokumpu Oyj ADR | Universal Stainless vs. Usinas Siderurgicas de | Universal Stainless vs. POSCO Holdings |
| Newmont Goldcorp vs. Pan American Silver | Newmont Goldcorp vs. Agnico Eagle Mines | Newmont Goldcorp vs. Kinross Gold | Newmont Goldcorp vs. Wheaton Precious Metals |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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