Correlation Between ARK Autonomous and NEWMONT

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

By analyzing existing cross correlation between ARK Autonomous Technology and NEWMONT MNG P, you can compare the effects of market volatilities on ARK Autonomous 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 ARK Autonomous with a short position of NEWMONT. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARK Autonomous and NEWMONT.

Diversification Opportunities for ARK Autonomous and NEWMONT

-0.61

Correlation Coefficient

ARK Autonomous  NEWMONT

Excellent diversification

The 3 months correlation between ARK and NEWMONT is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding ARK Autonomous Technology and NEWMONT MNG P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEWMONT MNG P and ARK Autonomous 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 ARK Autonomous Technology 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 MNG P has no effect on the direction of ARK Autonomous i.e., ARK Autonomous and NEWMONT go up and down completely randomly.

Pair Corralation between ARK Autonomous and NEWMONT

Given the investment horizon of 90 days ARK Autonomous Technology is expected to generate 2.56 times more return on investment than NEWMONT. However, ARK Autonomous is 2.56 times more volatile than NEWMONT MNG P. It trades about 0.17 of its potential returns per unit of risk. NEWMONT MNG P is currently generating about 0.26 per unit of risk. If you would invest  7,316  in ARK Autonomous Technology on September 23, 2024 and sell it today you would earn a total of  492.00  from holding ARK Autonomous Technology or generate 6.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	85.71%
Values	Daily Returns

ARK Autonomous Technology  vs.  NEWMONT MNG P

ARK Autonomous Technology

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ARK Autonomous Technology are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward-looking signals, ARK Autonomous reported solid returns over the last few months and may actually be approaching a breakup point.

NEWMONT MNG P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NEWMONT MNG P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NEWMONT is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ARK Autonomous and NEWMONT

The main advantage of trading using opposite ARK Autonomous and NEWMONT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARK Autonomous 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 ARK Autonomous Technology and NEWMONT MNG P 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.