Correlation Between Algoma Steel and Newmont Goldcorp
Can any of the company-specific risk be diversified away by investing in both Algoma Steel and Newmont Goldcorp 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 Algoma Steel and Newmont Goldcorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Algoma Steel Group and Newmont Goldcorp Corp, you can compare the effects of market volatilities on Algoma Steel and Newmont Goldcorp 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 Algoma Steel with a short position of Newmont Goldcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algoma Steel and Newmont Goldcorp.
Diversification Opportunities for Algoma Steel and Newmont Goldcorp
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Algoma and Newmont is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Algoma Steel Group and Newmont Goldcorp Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont Goldcorp Corp and Algoma Steel 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 Algoma Steel Group are associated (or correlated) with Newmont Goldcorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmont Goldcorp Corp has no effect on the direction of Algoma Steel i.e., Algoma Steel and Newmont Goldcorp go up and down completely randomly.
Pair Corralation between Algoma Steel and Newmont Goldcorp
Assuming the 90 days horizon Algoma Steel Group is expected to generate 5.6 times more return on investment than Newmont Goldcorp. However, Algoma Steel is 5.6 times more volatile than Newmont Goldcorp Corp. It trades about 0.05 of its potential returns per unit of risk. Newmont Goldcorp Corp is currently generating about 0.16 per unit of risk. If you would invest 50.00 in Algoma Steel Group on March 9, 2025 and sell it today you would lose (11.00) from holding Algoma Steel Group or give up 22.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.83% |
| Values | Daily Returns |
Algoma Steel Group vs. Newmont Goldcorp Corp
Performance |
| Timeline |
| Algoma Steel Group |
| Newmont Goldcorp Corp |
Algoma Steel and Newmont Goldcorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algoma Steel and Newmont Goldcorp
The main advantage of trading using opposite Algoma Steel and Newmont Goldcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algoma Steel position performs unexpectedly, Newmont Goldcorp 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 Goldcorp will offset losses from the drop in Newmont Goldcorp's long position.| Algoma Steel vs. Algoma Steel Group | Algoma Steel vs. Evolv Technologies Holdings | Algoma Steel vs. Valens Semiconductor |
| Newmont Goldcorp vs. United States Steel | Newmont Goldcorp vs. Reliance Steel Aluminum | Newmont Goldcorp vs. ArcelorMittal SA ADR | Newmont Goldcorp vs. Commercial Metals |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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