Correlation Between PT Bank and NOVAGOLD RESOURCES
Can any of the company-specific risk be diversified away by investing in both PT Bank 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 PT Bank and NOVAGOLD RESOURCES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Maybank and NOVAGOLD RESOURCES, you can compare the effects of market volatilities on PT Bank 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 PT Bank with a short position of NOVAGOLD RESOURCES. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and NOVAGOLD RESOURCES.
Diversification Opportunities for PT Bank and NOVAGOLD RESOURCES
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BOZA and NOVAGOLD is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Maybank and NOVAGOLD RESOURCES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOVAGOLD RESOURCES and PT Bank 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 PT Bank Maybank 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 PT Bank i.e., PT Bank and NOVAGOLD RESOURCES go up and down completely randomly.
Pair Corralation between PT Bank and NOVAGOLD RESOURCES
Assuming the 90 days trading horizon PT Bank Maybank is expected to generate 1.46 times more return on investment than NOVAGOLD RESOURCES. However, PT Bank is 1.46 times more volatile than NOVAGOLD RESOURCES. It trades about 0.03 of its potential returns per unit of risk. NOVAGOLD RESOURCES is currently generating about -0.02 per unit of risk. If you would invest 1.30 in PT Bank Maybank on September 20, 2024 and sell it today you would earn a total of 0.15 from holding PT Bank Maybank or generate 11.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
PT Bank Maybank vs. NOVAGOLD RESOURCES
Performance |
| Timeline |
| PT Bank Maybank |
| NOVAGOLD RESOURCES |
PT Bank and NOVAGOLD RESOURCES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and NOVAGOLD RESOURCES
The main advantage of trading using opposite PT Bank and NOVAGOLD RESOURCES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank 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.| PT Bank vs. ARDAGH METAL PACDL 0001 | PT Bank vs. Alaska Air Group | PT Bank vs. Fair Isaac Corp | PT Bank vs. Westinghouse Air Brake |
| NOVAGOLD RESOURCES vs. Host Hotels Resorts | NOVAGOLD RESOURCES vs. PT Bank Maybank | NOVAGOLD RESOURCES vs. REVO INSURANCE SPA | NOVAGOLD RESOURCES vs. CHIBA BANK |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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