Correlation Between Royal Gold and Newcrest Mining
Can any of the company-specific risk be diversified away by investing in both Royal Gold and Newcrest 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 Royal Gold and Newcrest Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Royal Gold and Newcrest Mining, you can compare the effects of market volatilities on Royal Gold and Newcrest 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 Royal Gold with a short position of Newcrest Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Gold and Newcrest Mining.
Diversification Opportunities for Royal Gold and Newcrest Mining
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Royal and Newcrest is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Royal Gold and Newcrest Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newcrest Mining and Royal Gold 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 Royal Gold are associated (or correlated) with Newcrest Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newcrest Mining has no effect on the direction of Royal Gold i.e., Royal Gold and Newcrest Mining go up and down completely randomly.
Pair Corralation between Royal Gold and Newcrest Mining
If you would invest 11,064 in Royal Gold on January 25, 2024 and sell it today you would earn a total of 1,029 from holding Royal Gold or generate 9.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Royal Gold vs. Newcrest Mining
Performance |
| Timeline |
| Royal Gold |
| Newcrest Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Royal Gold and Newcrest Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royal Gold and Newcrest Mining
The main advantage of trading using opposite Royal Gold and Newcrest Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Gold position performs unexpectedly, Newcrest 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 Newcrest Mining will offset losses from the drop in Newcrest Mining's long position.| Royal Gold vs. Centerra Gold | Royal Gold vs. Gold Fields Ltd | Royal Gold vs. Eldorado Gold Corp | Royal Gold vs. Osisko Gold Ro |
| Newcrest Mining vs. Big Ridge Gold | Newcrest Mining vs. Westhaven Gold Corp | Newcrest Mining vs. Satori Resources | Newcrest Mining vs. Osisko Mining |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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