Correlation Between Newmont Corp and FC Investment

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

By analyzing existing cross correlation between Newmont Corp and FC Investment Trust, you can compare the effects of market volatilities on Newmont Corp and FC Investment 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 FC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmont Corp and FC Investment.

Diversification Opportunities for Newmont Corp and FC Investment

-0.83

Correlation Coefficient

Newmont Corp  FC Investment

Pay attention - limited upside

The 3 months correlation between Newmont and FCIT is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Newmont Corp and FC Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FC Investment Trust 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 FC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FC Investment Trust has no effect on the direction of Newmont Corp i.e., Newmont Corp and FC Investment go up and down completely randomly.

Pair Corralation between Newmont Corp and FC Investment

Assuming the 90 days trading horizon Newmont Corp is expected to under-perform the FC Investment. In addition to that, Newmont Corp is 2.84 times more volatile than FC Investment Trust. It trades about -0.22 of its total potential returns per unit of risk. FC Investment Trust is currently generating about -0.05 per unit of volatility. If you would invest  113,796  in FC Investment Trust on October 9, 2024 and sell it today you would lose (796.00) from holding FC Investment Trust or give up 0.7% of portfolio value over 90 days.

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

Newmont Corp  vs.  FC Investment Trust

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.

FC Investment Trust

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in FC Investment Trust are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, FC Investment may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Newmont Corp and FC Investment

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

The idea behind Newmont Corp and FC Investment Trust 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.