Correlation Between Grande Portage and Novo Resources
Can any of the company-specific risk be diversified away by investing in both Grande Portage and Novo 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 Grande Portage and Novo Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grande Portage Resources and Novo Resources Corp, you can compare the effects of market volatilities on Grande Portage and Novo 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 Grande Portage with a short position of Novo Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grande Portage and Novo Resources.
Diversification Opportunities for Grande Portage and Novo Resources
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grande and Novo is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Grande Portage Resources and Novo Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novo Resources Corp and Grande Portage 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 Grande Portage Resources are associated (or correlated) with Novo Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novo Resources Corp has no effect on the direction of Grande Portage i.e., Grande Portage and Novo Resources go up and down completely randomly.
Pair Corralation between Grande Portage and Novo Resources
Assuming the 90 days horizon Grande Portage Resources is expected to under-perform the Novo Resources. But the otc stock apears to be less risky and, when comparing its historical volatility, Grande Portage Resources is 1.75 times less risky than Novo Resources. The otc stock trades about -0.09 of its potential returns per unit of risk. The Novo Resources Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5.54 in Novo Resources Corp on October 29, 2024 and sell it today you would earn a total of 0.43 from holding Novo Resources Corp or generate 7.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grande Portage Resources vs. Novo Resources Corp
Performance |
| Timeline |
| Grande Portage Resources |
| Novo Resources Corp |
Grande Portage and Novo Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grande Portage and Novo Resources
The main advantage of trading using opposite Grande Portage and Novo Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grande Portage position performs unexpectedly, Novo 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 Novo Resources will offset losses from the drop in Novo Resources' long position.| Grande Portage vs. Puma Exploration | Grande Portage vs. Sixty North Gold | Grande Portage vs. Red Pine Exploration | Grande Portage vs. Altamira Gold Corp |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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