Correlation Between AAC TECHNOLOGHLDGADR and NOVAGOLD RESOURCES
Can any of the company-specific risk be diversified away by investing in both AAC TECHNOLOGHLDGADR and NOVAGOLD RESOURCES 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 AAC TECHNOLOGHLDGADR and NOVAGOLD RESOURCES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAC TECHNOLOGHLDGADR and NOVAGOLD RESOURCES, you can compare the effects of market volatilities on AAC TECHNOLOGHLDGADR and NOVAGOLD RESOURCES 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 AAC TECHNOLOGHLDGADR with a short position of NOVAGOLD RESOURCES. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAC TECHNOLOGHLDGADR and NOVAGOLD RESOURCES.
Diversification Opportunities for AAC TECHNOLOGHLDGADR and NOVAGOLD RESOURCES
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AAC and NOVAGOLD is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding AAC TECHNOLOGHLDGADR and NOVAGOLD RESOURCES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOVAGOLD RESOURCES and AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR are associated (or correlated) with NOVAGOLD RESOURCES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOVAGOLD RESOURCES has no effect on the direction of AAC TECHNOLOGHLDGADR i.e., AAC TECHNOLOGHLDGADR and NOVAGOLD RESOURCES go up and down completely randomly.
Pair Corralation between AAC TECHNOLOGHLDGADR and NOVAGOLD RESOURCES
Assuming the 90 days horizon AAC TECHNOLOGHLDGADR is expected to generate 1.04 times more return on investment than NOVAGOLD RESOURCES. However, AAC TECHNOLOGHLDGADR is 1.04 times more volatile than NOVAGOLD RESOURCES. It trades about 0.07 of its potential returns per unit of risk. NOVAGOLD RESOURCES is currently generating about 0.0 per unit of risk. If you would invest 352.00 in AAC TECHNOLOGHLDGADR on September 26, 2024 and sell it today you would earn a total of 94.00 from holding AAC TECHNOLOGHLDGADR or generate 26.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AAC TECHNOLOGHLDGADR vs. NOVAGOLD RESOURCES
Performance |
| Timeline |
| AAC TECHNOLOGHLDGADR |
| NOVAGOLD RESOURCES |
AAC TECHNOLOGHLDGADR and NOVAGOLD RESOURCES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAC TECHNOLOGHLDGADR and NOVAGOLD RESOURCES
The main advantage of trading using opposite AAC TECHNOLOGHLDGADR and NOVAGOLD RESOURCES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAC TECHNOLOGHLDGADR position performs unexpectedly, NOVAGOLD RESOURCES 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 NOVAGOLD RESOURCES will offset losses from the drop in NOVAGOLD RESOURCES's long position.| AAC TECHNOLOGHLDGADR vs. Cisco Systems | AAC TECHNOLOGHLDGADR vs. Cisco Systems | AAC TECHNOLOGHLDGADR vs. Motorola Solutions | AAC TECHNOLOGHLDGADR vs. Nokia |
| NOVAGOLD RESOURCES vs. AAC TECHNOLOGHLDGADR | NOVAGOLD RESOURCES vs. Performance Food Group | NOVAGOLD RESOURCES vs. National Beverage Corp | NOVAGOLD RESOURCES vs. CN MODERN DAIRY |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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