Correlation Between PAO NOVATEK and Black Dragon

Can any of the company-specific risk be diversified away by investing in both PAO NOVATEK and Black Dragon 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 PAO NOVATEK and Black Dragon into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PAO NOVATEK and Black Dragon Resource, you can compare the effects of market volatilities on PAO NOVATEK and Black Dragon 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 PAO NOVATEK with a short position of Black Dragon. Check out your portfolio center. Please also check ongoing floating volatility patterns of PAO NOVATEK and Black Dragon.

Diversification Opportunities for PAO NOVATEK and Black Dragon

-1.0

Correlation Coefficient

PAO NOVATEK  Black Dragon

Pay attention - limited upside

The 3 months correlation between PAO and Black is -1.0. Overlapping area represents the amount of risk that can be diversified away by holding PAO NOVATEK and Black Dragon Resource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Dragon Resource and PAO NOVATEK 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 PAO NOVATEK are associated (or correlated) with Black Dragon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Dragon Resource has no effect on the direction of PAO NOVATEK i.e., PAO NOVATEK and Black Dragon go up and down completely randomly.

Pair Corralation between PAO NOVATEK and Black Dragon

If you would invest  2,229  in PAO NOVATEK on September 13, 2024 and sell it today you would earn a total of  0.00  from holding PAO NOVATEK or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Strong
Accuracy	4.55%
Values	Daily Returns

PAO NOVATEK  vs.  Black Dragon Resource

PAO NOVATEK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PAO NOVATEK has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, PAO NOVATEK is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Black Dragon Resource

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Black Dragon Resource has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with PAO NOVATEK and Black Dragon

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

The idea behind PAO NOVATEK and Black Dragon Resource 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.