Correlation Between Nok Airlines and Newmont

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

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

Diversification Opportunities for Nok Airlines and Newmont

0.0

Correlation Coefficient

Nok Airlines  Newmont

Pay attention - limited upside

The 3 months correlation between Nok and Newmont is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nok Airlines PCL and Newmont in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont and Nok Airlines 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 Nok Airlines PCL 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 Nok Airlines i.e., Nok Airlines and Newmont go up and down completely randomly.

Pair Corralation between Nok Airlines and Newmont

If you would invest  3,591  in Newmont on December 21, 2024 and sell it today you would earn a total of  835.00  from holding Newmont or generate 23.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Nok Airlines PCL  vs.  Newmont

Nok Airlines PCL

Risk-Adjusted Performance

Very Weak

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

Newmont

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Newmont are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile primary indicators, Newmont displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nok Airlines and Newmont

The main advantage of trading using opposite Nok Airlines and Newmont positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nok Airlines 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 Nok Airlines PCL 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.