Correlation Between NovaGold Resources and National Bank
Can any of the company-specific risk be diversified away by investing in both NovaGold Resources and National Bank 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 NovaGold Resources and National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NovaGold Resources and National Bank of, you can compare the effects of market volatilities on NovaGold Resources and National Bank 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 NovaGold Resources with a short position of National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of NovaGold Resources and National Bank.
Diversification Opportunities for NovaGold Resources and National Bank
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NovaGold and National is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding NovaGold Resources and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank and NovaGold Resources 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 NovaGold Resources are associated (or correlated) with National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank has no effect on the direction of NovaGold Resources i.e., NovaGold Resources and National Bank go up and down completely randomly.
Pair Corralation between NovaGold Resources and National Bank
Assuming the 90 days horizon NovaGold Resources is expected to generate 2.53 times more return on investment than National Bank. However, NovaGold Resources is 2.53 times more volatile than National Bank of. It trades about -0.06 of its potential returns per unit of risk. National Bank of is currently generating about -0.19 per unit of risk. If you would invest 499.00 in NovaGold Resources on December 2, 2024 and sell it today you would lose (63.00) from holding NovaGold Resources or give up 12.63% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
NovaGold Resources vs. National Bank of
Performance |
Timeline |
NovaGold Resources |
National Bank |
NovaGold Resources and National Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NovaGold Resources and National Bank
The main advantage of trading using opposite NovaGold Resources and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NovaGold Resources position performs unexpectedly, National Bank 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 National Bank will offset losses from the drop in National Bank's long position.NovaGold Resources vs. Centerra Gold | NovaGold Resources vs. Alamos Gold | NovaGold Resources vs. MAG Silver Corp | NovaGold Resources vs. Seabridge Gold |
National Bank vs. Canadian Imperial Bank | National Bank vs. Bank of Montreal | National Bank vs. Royal Bank of | National Bank vs. Bank of Nova |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |