Correlation Between Digimarc and NEWMONT

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

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

Diversification Opportunities for Digimarc and NEWMONT

-0.27

Correlation Coefficient

Digimarc  NEWMONT

Very good diversification

The 3 months correlation between Digimarc and NEWMONT is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Digimarc 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 Digimarc 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 Digimarc 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 Digimarc i.e., Digimarc and NEWMONT go up and down completely randomly.

Pair Corralation between Digimarc and NEWMONT

Given the investment horizon of 90 days Digimarc is expected to under-perform the NEWMONT. In addition to that, Digimarc is 7.73 times more volatile than NEWMONT MNG P. It trades about -0.2 of its total potential returns per unit of risk. NEWMONT MNG P is currently generating about -0.06 per unit of volatility. If you would invest  9,118  in NEWMONT MNG P on December 30, 2024 and sell it today you would lose (280.00) from holding NEWMONT MNG P or give up 3.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	87.1%
Values	Daily Returns

Digimarc  vs.  NEWMONT MNG P

Digimarc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Digimarc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

NEWMONT MNG P

Risk-Adjusted Performance

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 recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Digimarc and NEWMONT

The main advantage of trading using opposite Digimarc and NEWMONT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digimarc 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 Digimarc 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.