Correlation Between Newmont and GEELY AUTOMOBILE

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

By analyzing existing cross correlation between Newmont and GEELY AUTOMOBILE, you can compare the effects of market volatilities on Newmont and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newmont and GEELY AUTOMOBILE.

Diversification Opportunities for Newmont and GEELY AUTOMOBILE

-0.37

Correlation Coefficient

Newmont  GEELY AUTOMOBILE

Very good diversification

The 3 months correlation between Newmont and GEELY is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Newmont and GEELY AUTOMOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEELY AUTOMOBILE 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 GEELY AUTOMOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEELY AUTOMOBILE has no effect on the direction of Newmont i.e., Newmont and GEELY AUTOMOBILE go up and down completely randomly.

Pair Corralation between Newmont and GEELY AUTOMOBILE

Assuming the 90 days trading horizon Newmont is expected to generate 4.18 times less return on investment than GEELY AUTOMOBILE. But when comparing it to its historical volatility, Newmont is 1.17 times less risky than GEELY AUTOMOBILE. It trades about 0.02 of its potential returns per unit of risk. GEELY AUTOMOBILE is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  91.00  in GEELY AUTOMOBILE on October 22, 2024 and sell it today you would earn a total of  87.00  from holding GEELY AUTOMOBILE or generate 95.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Newmont  vs.  GEELY AUTOMOBILE

Newmont

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Newmont has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

GEELY AUTOMOBILE

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GEELY AUTOMOBILE are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, GEELY AUTOMOBILE may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Newmont and GEELY AUTOMOBILE

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

The idea behind Newmont and GEELY AUTOMOBILE 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.