Correlation Between GM and NEWMONT
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By analyzing existing cross correlation between General Motors and NEWMONT MNG P, you can compare the effects of market volatilities on GM 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 GM with a short position of NEWMONT. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and NEWMONT.
Diversification Opportunities for GM and NEWMONT
Excellent diversification
The 3 months correlation between GM and NEWMONT is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding General Motors 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 GM 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 General Motors 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 GM i.e., GM and NEWMONT go up and down completely randomly.
Pair Corralation between GM and NEWMONT
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.89 times more return on investment than NEWMONT. However, GM is 1.89 times more volatile than NEWMONT MNG P. It trades about 0.03 of its potential returns per unit of risk. NEWMONT MNG P is currently generating about -0.05 per unit of risk. If you would invest 4,852 in General Motors on October 13, 2024 and sell it today you would earn a total of 133.00 from holding General Motors or generate 2.74% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 85.48% |
Values | Daily Returns |
General Motors vs. NEWMONT MNG P
Performance |
Timeline |
General Motors |
NEWMONT MNG P |
GM and NEWMONT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GM and NEWMONT
The main advantage of trading using opposite GM and NEWMONT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM 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.GM vs. Canoo Inc | ||
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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