Correlation Between Newmont Corp and Uniper SE

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

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

Diversification Opportunities for Newmont Corp and Uniper SE

0.77

Correlation Coefficient

Newmont Corp  Uniper SE

Poor diversification

The 3 months correlation between Newmont and Uniper is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Newmont Corp and Uniper SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniper SE and Newmont Corp 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 Corp are associated (or correlated) with Uniper SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniper SE has no effect on the direction of Newmont Corp i.e., Newmont Corp and Uniper SE go up and down completely randomly.

Pair Corralation between Newmont Corp and Uniper SE

Assuming the 90 days trading horizon Newmont Corp is expected to under-perform the Uniper SE. But the stock apears to be less risky and, when comparing its historical volatility, Newmont Corp is 1.07 times less risky than Uniper SE. The stock trades about -0.29 of its potential returns per unit of risk. The Uniper SE is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  4,128  in Uniper SE on September 24, 2024 and sell it today you would lose (173.00) from holding Uniper SE or give up 4.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Newmont Corp  vs.  Uniper SE

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 January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Uniper SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Uniper SE 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 basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Newmont Corp and Uniper SE

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

The idea behind Newmont Corp and Uniper SE 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.