Correlation Between Newcrest Mining and Sirios Resources

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

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

Diversification Opportunities for Newcrest Mining and Sirios Resources

0.0

Correlation Coefficient

Newcrest Mining  Sirios Resources

Pay attention - limited upside

The 3 months correlation between Newcrest and Sirios is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Newcrest Mining and Sirios Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sirios Resources and Newcrest Mining 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 Newcrest Mining are associated (or correlated) with Sirios Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sirios Resources has no effect on the direction of Newcrest Mining i.e., Newcrest Mining and Sirios Resources go up and down completely randomly.

Pair Corralation between Newcrest Mining and Sirios Resources

If you would invest  3.32  in Sirios Resources on December 29, 2024 and sell it today you would lose (0.06) from holding Sirios Resources or give up 1.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Newcrest Mining  vs.  Sirios Resources

Newcrest Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Newcrest Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Newcrest Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sirios Resources

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sirios Resources are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Sirios Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Newcrest Mining and Sirios Resources

The main advantage of trading using opposite Newcrest Mining and Sirios Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newcrest Mining position performs unexpectedly, Sirios Resources 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 Sirios Resources will offset losses from the drop in Sirios Resources' long position.

The idea behind Newcrest Mining and Sirios Resources 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.