Correlation Between Ametek and Newmont Corp

Can any of the company-specific risk be diversified away by investing in both Ametek 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 Ametek and Newmont Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ametek Inc and Newmont Corp, you can compare the effects of market volatilities on Ametek 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 Ametek with a short position of Newmont Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ametek and Newmont Corp.

Diversification Opportunities for Ametek and Newmont Corp

-0.89

Correlation Coefficient

Ametek  Newmont Corp

Pay attention - limited upside

The 3 months correlation between Ametek and Newmont is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Ametek Inc and Newmont Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont Corp and Ametek 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 Ametek Inc 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 Ametek i.e., Ametek and Newmont Corp go up and down completely randomly.

Pair Corralation between Ametek and Newmont Corp

Assuming the 90 days trading horizon Ametek Inc is expected to generate 0.62 times more return on investment than Newmont Corp. However, Ametek Inc is 1.61 times less risky than Newmont Corp. It trades about 0.05 of its potential returns per unit of risk. Newmont Corp is currently generating about -0.01 per unit of risk. If you would invest  13,827  in Ametek Inc on September 23, 2024 and sell it today you would earn a total of  4,560  from holding Ametek Inc or generate 32.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.17%
Values	Daily Returns

Ametek Inc  vs.  Newmont Corp

Ametek Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ametek Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Ametek may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Newmont Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Newmont Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Ametek and Newmont Corp

The main advantage of trading using opposite Ametek and Newmont Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ametek 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.

The idea behind Ametek Inc and Newmont Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.