Correlation Between Newmont Corp and Albion Technology

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

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

Diversification Opportunities for Newmont Corp and Albion Technology

0.53

Correlation Coefficient

Newmont Corp  Albion Technology

Very weak diversification

The 3 months correlation between Newmont and Albion is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Newmont Corp and Albion Technology General in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Albion Technology General and Newmont Corp 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 Newmont Corp are associated (or correlated) with Albion Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Albion Technology General has no effect on the direction of Newmont Corp i.e., Newmont Corp and Albion Technology go up and down completely randomly.

Pair Corralation between Newmont Corp and Albion Technology

Assuming the 90 days trading horizon Newmont Corp is expected to under-perform the Albion Technology. In addition to that, Newmont Corp is 4.0 times more volatile than Albion Technology General. It trades about -0.22 of its total potential returns per unit of risk. Albion Technology General is currently generating about -0.3 per unit of volatility. If you would invest  7,000  in Albion Technology General on October 9, 2024 and sell it today you would lose (200.00) from holding Albion Technology General or give up 2.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Newmont Corp  vs.  Albion Technology General

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 February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Albion Technology General

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Albion Technology General has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Albion Technology is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Newmont Corp and Albion Technology

The main advantage of trading using opposite Newmont Corp and Albion Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmont Corp position performs unexpectedly, Albion Technology 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 Albion Technology will offset losses from the drop in Albion Technology's long position.

The idea behind Newmont Corp and Albion Technology General 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.