Correlation Between Unilever PLC and Newmont Corp
Can any of the company-specific risk be diversified away by investing in both Unilever PLC 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 Unilever PLC and Newmont Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unilever PLC and Newmont Corp, you can compare the effects of market volatilities on Unilever PLC 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 Unilever PLC with a short position of Newmont Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unilever PLC and Newmont Corp.
Diversification Opportunities for Unilever PLC and Newmont Corp
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Unilever and Newmont is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Unilever PLC and Newmont Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont Corp and Unilever PLC 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 Unilever PLC 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 Unilever PLC i.e., Unilever PLC and Newmont Corp go up and down completely randomly.
Pair Corralation between Unilever PLC and Newmont Corp
Assuming the 90 days trading horizon Unilever PLC is expected to generate 0.33 times more return on investment than Newmont Corp. However, Unilever PLC is 3.0 times less risky than Newmont Corp. It trades about -0.11 of its potential returns per unit of risk. Newmont Corp is currently generating about -0.2 per unit of risk. If you would invest 486,200 in Unilever PLC on September 25, 2024 and sell it today you would lose (30,700) from holding Unilever PLC or give up 6.31% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.46% |
Values | Daily Returns |
Unilever PLC vs. Newmont Corp
Performance |
Timeline |
Unilever PLC |
Newmont Corp |
Unilever PLC and Newmont Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Unilever PLC and Newmont Corp
The main advantage of trading using opposite Unilever PLC and Newmont Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unilever PLC 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.Unilever PLC vs. Toyota Motor Corp | Unilever PLC vs. SoftBank Group Corp | Unilever PLC vs. OTP Bank Nyrt | Unilever PLC vs. Newmont Corp |
Newmont Corp vs. Uniper SE | Newmont Corp vs. Mulberry Group PLC | Newmont Corp vs. London Security Plc | Newmont Corp vs. Triad Group PLC |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |