Correlation Between SCIENCE IN and Newmont

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

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

Diversification Opportunities for SCIENCE IN and Newmont

-0.65

Correlation Coefficient

SCIENCE IN  Newmont

Excellent diversification

The 3 months correlation between SCIENCE and Newmont is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding SCIENCE IN SPORT and Newmont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont and SCIENCE IN 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 SCIENCE IN SPORT 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 SCIENCE IN i.e., SCIENCE IN and Newmont go up and down completely randomly.

Pair Corralation between SCIENCE IN and Newmont

Assuming the 90 days horizon SCIENCE IN SPORT is expected to generate 1.57 times more return on investment than Newmont. However, SCIENCE IN is 1.57 times more volatile than Newmont. It trades about 0.03 of its potential returns per unit of risk. Newmont is currently generating about -0.14 per unit of risk. If you would invest  28.00  in SCIENCE IN SPORT on October 8, 2024 and sell it today you would earn a total of  1.00  from holding SCIENCE IN SPORT or generate 3.57% return on investment over 90 days.

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

SCIENCE IN SPORT  vs.  Newmont

SCIENCE IN SPORT

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SCIENCE IN SPORT are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SCIENCE IN may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Newmont

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Newmont has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with SCIENCE IN and Newmont

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

Check out your portfolio center.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.