Correlation Between Newmont and Home Depot

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

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

Diversification Opportunities for Newmont and Home Depot

0.0

Correlation Coefficient

Newmont  Home Depot

Pay attention - limited upside

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

Pair Corralation between Newmont and Home Depot

If you would invest  0.00  in Newmont on December 21, 2024 and sell it today you would earn a total of  0.00  from holding Newmont or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.69%
Values	Daily Returns

Newmont  vs.  The Home Depot

Newmont

Risk-Adjusted Performance

Good

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

Home Depot

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Home Depot has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's forward indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Newmont and Home Depot

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

The idea behind Newmont and The Home Depot 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.