Correlation Between Newmont and PLATO GOLD
Can any of the company-specific risk be diversified away by investing in both Newmont and PLATO GOLD 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 PLATO GOLD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newmont and PLATO GOLD P, you can compare the effects of market volatilities on Newmont and PLATO GOLD 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 PLATO GOLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmont and PLATO GOLD.
Diversification Opportunities for Newmont and PLATO GOLD
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Newmont and PLATO is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Newmont and PLATO GOLD P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLATO GOLD P 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 PLATO GOLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLATO GOLD P has no effect on the direction of Newmont i.e., Newmont and PLATO GOLD go up and down completely randomly.
Pair Corralation between Newmont and PLATO GOLD
Assuming the 90 days horizon Newmont is expected to generate 530.11 times less return on investment than PLATO GOLD. But when comparing it to its historical volatility, Newmont is 12.82 times less risky than PLATO GOLD. It trades about 0.0 of its potential returns per unit of risk. PLATO GOLD P is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.80 in PLATO GOLD P on September 24, 2024 and sell it today you would lose (0.15) from holding PLATO GOLD P or give up 18.75% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Newmont vs. PLATO GOLD P
Performance |
Timeline |
Newmont |
PLATO GOLD P |
Newmont and PLATO GOLD Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Newmont and PLATO GOLD
The main advantage of trading using opposite Newmont and PLATO GOLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newmont position performs unexpectedly, PLATO GOLD 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 PLATO GOLD will offset losses from the drop in PLATO GOLD's long position.Newmont vs. ZIJIN MINH UNSPADR20 | Newmont vs. Barrick Gold | Newmont vs. Franco Nevada | Newmont vs. Agnico Eagle Mines |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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