Correlation Between LIFENET INSURANCE and Newmont

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

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

Diversification Opportunities for LIFENET INSURANCE and Newmont

0.12

Correlation Coefficient

LIFENET INSURANCE  Newmont

Average diversification

The 3 months correlation between LIFENET and Newmont is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding LIFENET INSURANCE CO and Newmont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont and LIFENET INSURANCE 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 LIFENET INSURANCE CO are associated (or correlated) with Newmont. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmont has no effect on the direction of LIFENET INSURANCE i.e., LIFENET INSURANCE and Newmont go up and down completely randomly.

Pair Corralation between LIFENET INSURANCE and Newmont

Assuming the 90 days horizon LIFENET INSURANCE CO is expected to under-perform the Newmont. But the stock apears to be less risky and, when comparing its historical volatility, LIFENET INSURANCE CO is 1.19 times less risky than Newmont. The stock trades about -0.06 of its potential returns per unit of risk. The Newmont is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  3,591  in Newmont on December 22, 2024 and sell it today you would earn a total of  729.00  from holding Newmont or generate 20.3% return on investment over 90 days.

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

LIFENET INSURANCE CO  vs.  Newmont

LIFENET INSURANCE

Risk-Adjusted Performance

Very Weak

Over the last 90 days LIFENET INSURANCE CO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Newmont

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Newmont are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile primary indicators, Newmont sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LIFENET INSURANCE and Newmont

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

The idea behind LIFENET INSURANCE CO and Newmont 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.