Correlation Between Newmont Goldcorp and Omineca Mining

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

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

Diversification Opportunities for Newmont Goldcorp and Omineca Mining

0.16

Correlation Coefficient

Newmont Goldcorp  Omineca Mining

Average diversification

The 3 months correlation between Newmont and Omineca is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Newmont Goldcorp Corp and Omineca Mining and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omineca Mining and Newmont Goldcorp 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 Newmont Goldcorp Corp are associated (or correlated) with Omineca Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omineca Mining has no effect on the direction of Newmont Goldcorp i.e., Newmont Goldcorp and Omineca Mining go up and down completely randomly.

Pair Corralation between Newmont Goldcorp and Omineca Mining

Considering the 90-day investment horizon Newmont Goldcorp Corp is expected to generate 0.16 times more return on investment than Omineca Mining. However, Newmont Goldcorp Corp is 6.1 times less risky than Omineca Mining. It trades about 0.3 of its potential returns per unit of risk. Omineca Mining and is currently generating about -0.1 per unit of risk. If you would invest  3,831  in Newmont Goldcorp Corp on October 25, 2024 and sell it today you would earn a total of  337.00  from holding Newmont Goldcorp Corp or generate 8.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Newmont Goldcorp Corp  vs.  Omineca Mining and

Newmont Goldcorp Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Newmont Goldcorp Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Omineca Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Omineca Mining and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Omineca Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Newmont Goldcorp and Omineca Mining

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

The idea behind Newmont Goldcorp Corp and Omineca Mining and 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.