Correlation Between Wheaton Precious and Newmont Goldcorp
Can any of the company-specific risk be diversified away by investing in both Wheaton Precious 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 Wheaton Precious and Newmont Goldcorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wheaton Precious Metals and Newmont Goldcorp Corp, you can compare the effects of market volatilities on Wheaton Precious 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 Wheaton Precious with a short position of Newmont Goldcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wheaton Precious and Newmont Goldcorp.
Diversification Opportunities for Wheaton Precious and Newmont Goldcorp
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wheaton and Newmont is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals 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 Wheaton Precious 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 Wheaton Precious Metals 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 Wheaton Precious i.e., Wheaton Precious and Newmont Goldcorp go up and down completely randomly.
Pair Corralation between Wheaton Precious and Newmont Goldcorp
Considering the 90-day investment horizon Wheaton Precious Metals is expected to generate 0.84 times more return on investment than Newmont Goldcorp. However, Wheaton Precious Metals is 1.19 times less risky than Newmont Goldcorp. It trades about 0.07 of its potential returns per unit of risk. Newmont Goldcorp Corp is currently generating about 0.01 per unit of risk. If you would invest 3,796 in Wheaton Precious Metals on August 24, 2024 and sell it today you would earn a total of 2,552 from holding Wheaton Precious Metals or generate 67.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wheaton Precious Metals vs. Newmont Goldcorp Corp
Performance |
| Timeline |
| Wheaton Precious Metals |
| Newmont Goldcorp Corp |
Wheaton Precious and Newmont Goldcorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wheaton Precious and Newmont Goldcorp
The main advantage of trading using opposite Wheaton Precious and Newmont Goldcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wheaton Precious 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.| Wheaton Precious vs. Royal Gold | Wheaton Precious vs. Agnico Eagle Mines | Wheaton Precious vs. Sandstorm Gold Ltd | Wheaton Precious vs. Osisko Gold Ro |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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