Correlation Between Apple and Newmont

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

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

Diversification Opportunities for Apple and Newmont

-0.38

Correlation Coefficient

Apple  Newmont

Very good diversification

The 3 months correlation between Apple and Newmont is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Newmont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont and Apple 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 Apple Inc 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 Apple i.e., Apple and Newmont go up and down completely randomly.

Pair Corralation between Apple and Newmont

Assuming the 90 days trading horizon Apple Inc is expected to under-perform the Newmont. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 1.12 times less risky than Newmont. The stock trades about -0.11 of its potential returns per unit of risk. The Newmont is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  3,978  in Newmont on December 11, 2024 and sell it today you would lose (73.00) from holding Newmont or give up 1.84% of portfolio value over 90 days.

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

Apple Inc  vs.  Newmont

Apple Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Newmont

Risk-Adjusted Performance

Weak

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

Pair Trading with Apple and Newmont

The main advantage of trading using opposite Apple and Newmont positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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 Apple Inc 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.