Correlation Between Newmont Corp and Tavistock Investments

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

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

Diversification Opportunities for Newmont Corp and Tavistock Investments

-0.29

Correlation Coefficient

Newmont Corp  Tavistock Investments

Very good diversification

The 3 months correlation between Newmont and Tavistock is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Newmont Corp and Tavistock Investments Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tavistock Investments Plc 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 Tavistock Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tavistock Investments Plc has no effect on the direction of Newmont Corp i.e., Newmont Corp and Tavistock Investments go up and down completely randomly.

Pair Corralation between Newmont Corp and Tavistock Investments

Assuming the 90 days trading horizon Newmont Corp is expected to under-perform the Tavistock Investments. But the stock apears to be less risky and, when comparing its historical volatility, Newmont Corp is 1.66 times less risky than Tavistock Investments. The stock trades about -0.17 of its potential returns per unit of risk. The Tavistock Investments Plc is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  352.00  in Tavistock Investments Plc on October 9, 2024 and sell it today you would earn a total of  73.00  from holding Tavistock Investments Plc or generate 20.74% return on investment over 90 days.

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

Newmont Corp  vs.  Tavistock Investments Plc

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.

Tavistock Investments Plc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tavistock Investments Plc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Tavistock Investments unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Newmont Corp and Tavistock Investments

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

The idea behind Newmont Corp and Tavistock Investments Plc 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.