Correlation Between Dakota Gold and NovaGold Resources
Can any of the company-specific risk be diversified away by investing in both Dakota Gold 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 Dakota Gold and NovaGold Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dakota Gold Corp and NovaGold Resources, you can compare the effects of market volatilities on Dakota Gold 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 Dakota Gold with a short position of NovaGold Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dakota Gold and NovaGold Resources.
Diversification Opportunities for Dakota Gold and NovaGold Resources
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dakota and NovaGold is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Dakota Gold Corp and NovaGold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NovaGold Resources and Dakota Gold 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 Dakota Gold Corp 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 Dakota Gold i.e., Dakota Gold and NovaGold Resources go up and down completely randomly.
Pair Corralation between Dakota Gold and NovaGold Resources
Allowing for the 90-day total investment horizon Dakota Gold Corp is expected to generate 0.86 times more return on investment than NovaGold Resources. However, Dakota Gold Corp is 1.16 times less risky than NovaGold Resources. It trades about 0.02 of its potential returns per unit of risk. NovaGold Resources is currently generating about -0.06 per unit of risk. If you would invest 218.00 in Dakota Gold Corp on November 2, 2024 and sell it today you would earn a total of 7.00 from holding Dakota Gold Corp or generate 3.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dakota Gold Corp vs. NovaGold Resources
Performance |
| Timeline |
| Dakota Gold Corp |
| NovaGold Resources |
Dakota Gold and NovaGold Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dakota Gold and NovaGold Resources
The main advantage of trading using opposite Dakota Gold and NovaGold Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dakota Gold 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.| Dakota Gold vs. Osisko Development Corp | Dakota Gold vs. Osisko Development Corp | Dakota Gold vs. Gold Royalty Corp | Dakota Gold vs. Carbon Streaming Corp |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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