Correlation Between SANTANDER and Newmont Corp

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

By analyzing existing cross correlation between SANTANDER UK 10 and Newmont Corp, you can compare the effects of market volatilities on SANTANDER and Newmont Corp 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 SANTANDER with a short position of Newmont Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANTANDER and Newmont Corp.

Diversification Opportunities for SANTANDER and Newmont Corp

0.3

Correlation Coefficient

SANTANDER  Newmont Corp

Weak diversification

The 3 months correlation between SANTANDER and Newmont is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding SANTANDER UK 10 and Newmont Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont Corp and SANTANDER 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 SANTANDER UK 10 are associated (or correlated) with Newmont Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmont Corp has no effect on the direction of SANTANDER i.e., SANTANDER and Newmont Corp go up and down completely randomly.

Pair Corralation between SANTANDER and Newmont Corp

Assuming the 90 days trading horizon SANTANDER UK 10 is expected to under-perform the Newmont Corp. But the stock apears to be less risky and, when comparing its historical volatility, SANTANDER UK 10 is 8.23 times less risky than Newmont Corp. The stock trades about -0.25 of its potential returns per unit of risk. The Newmont Corp is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest  3,724  in Newmont Corp on October 21, 2024 and sell it today you would earn a total of  440.00  from holding Newmont Corp or generate 11.82% return on investment over 90 days.

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

SANTANDER UK 10  vs.  Newmont Corp

SANTANDER UK 10

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SANTANDER UK 10 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, SANTANDER is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Newmont Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Newmont 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 basic 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.

Pair Trading with SANTANDER and Newmont Corp

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

The idea behind SANTANDER UK 10 and Newmont Corp 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.