Correlation Between NEWMONT PORATION and AiMedia Technologies

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

By analyzing existing cross correlation between NEWMONT PORATION CDI and AiMedia Technologies, you can compare the effects of market volatilities on NEWMONT PORATION and AiMedia Technologies 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 PORATION with a short position of AiMedia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEWMONT PORATION and AiMedia Technologies.

Diversification Opportunities for NEWMONT PORATION and AiMedia Technologies

-0.37

Correlation Coefficient

NEWMONT PORATION  AiMedia Technologies

Very good diversification

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

Pair Corralation between NEWMONT PORATION and AiMedia Technologies

Assuming the 90 days trading horizon NEWMONT PORATION is expected to generate 6.2 times less return on investment than AiMedia Technologies. But when comparing it to its historical volatility, NEWMONT PORATION CDI is 1.82 times less risky than AiMedia Technologies. It trades about 0.03 of its potential returns per unit of risk. AiMedia Technologies is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  27.00  in AiMedia Technologies on September 12, 2024 and sell it today you would earn a total of  57.00  from holding AiMedia Technologies or generate 211.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.33%
Values	Daily Returns

NEWMONT PORATION CDI  vs.  AiMedia Technologies

NEWMONT PORATION CDI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NEWMONT PORATION CDI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

AiMedia Technologies

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AiMedia Technologies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, AiMedia Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NEWMONT PORATION and AiMedia Technologies

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

The idea behind NEWMONT PORATION CDI and AiMedia Technologies 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.