Correlation Between Celanese and NovaGold Resources
Can any of the company-specific risk be diversified away by investing in both Celanese 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 Celanese and NovaGold Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celanese and NovaGold Resources, you can compare the effects of market volatilities on Celanese 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 Celanese with a short position of NovaGold Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celanese and NovaGold Resources.
Diversification Opportunities for Celanese and NovaGold Resources
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Celanese and NovaGold is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Celanese and NovaGold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NovaGold Resources and Celanese 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 Celanese 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 Celanese i.e., Celanese and NovaGold Resources go up and down completely randomly.
Pair Corralation between Celanese and NovaGold Resources
Allowing for the 90-day total investment horizon Celanese is expected to under-perform the NovaGold Resources. In addition to that, Celanese is 1.05 times more volatile than NovaGold Resources. It trades about -0.14 of its total potential returns per unit of risk. NovaGold Resources is currently generating about -0.06 per unit of volatility. If you would invest 397.00 in NovaGold Resources on November 2, 2024 and sell it today you would lose (84.00) from holding NovaGold Resources or give up 21.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Celanese vs. NovaGold Resources
Performance |
| Timeline |
| Celanese |
| NovaGold Resources |
Celanese and NovaGold Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Celanese and NovaGold Resources
The main advantage of trading using opposite Celanese and NovaGold Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celanese 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' long position.| Celanese vs. Tronox Holdings PLC | Celanese vs. Green Plains Renewable | Celanese vs. Lsb Industries | Celanese vs. Valhi Inc |
| NovaGold Resources vs. Seabridge Gold | NovaGold Resources vs. Eldorado Gold Corp | NovaGold Resources vs. New Gold | NovaGold Resources vs. IAMGold |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| CEOs Directory Screen CEOs from public companies around the world |