Correlation Between PTT Global and NOVAGOLD RESOURCES
Can any of the company-specific risk be diversified away by investing in both PTT Global 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 PTT Global and NOVAGOLD RESOURCES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PTT Global Chemical and NOVAGOLD RESOURCES, you can compare the effects of market volatilities on PTT Global 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 PTT Global with a short position of NOVAGOLD RESOURCES. Check out your portfolio center. Please also check ongoing floating volatility patterns of PTT Global and NOVAGOLD RESOURCES.
Diversification Opportunities for PTT Global and NOVAGOLD RESOURCES
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between PTT and NOVAGOLD is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding PTT Global Chemical and NOVAGOLD RESOURCES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOVAGOLD RESOURCES and PTT Global 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 PTT Global Chemical 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 PTT Global i.e., PTT Global and NOVAGOLD RESOURCES go up and down completely randomly.
Pair Corralation between PTT Global and NOVAGOLD RESOURCES
Assuming the 90 days trading horizon PTT Global Chemical is expected to generate 1.49 times more return on investment than NOVAGOLD RESOURCES. However, PTT Global is 1.49 times more volatile than NOVAGOLD RESOURCES. It trades about -0.09 of its potential returns per unit of risk. NOVAGOLD RESOURCES is currently generating about -0.16 per unit of risk. If you would invest 65.00 in PTT Global Chemical on October 13, 2024 and sell it today you would lose (5.00) from holding PTT Global Chemical or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
PTT Global Chemical vs. NOVAGOLD RESOURCES
Performance |
| Timeline |
| PTT Global Chemical |
| NOVAGOLD RESOURCES |
PTT Global and NOVAGOLD RESOURCES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PTT Global and NOVAGOLD RESOURCES
The main advantage of trading using opposite PTT Global and NOVAGOLD RESOURCES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PTT Global 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.| PTT Global vs. Broadwind | PTT Global vs. CanSino Biologics | PTT Global vs. ScanSource | PTT Global vs. FRACTAL GAMING GROUP |
| NOVAGOLD RESOURCES vs. Pembina Pipeline Corp | NOVAGOLD RESOURCES vs. CLEAN ENERGY FUELS | NOVAGOLD RESOURCES vs. CVW CLEANTECH INC | NOVAGOLD RESOURCES vs. Delta Electronics Public |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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