Correlation Between Precious Metals and NovaGold Resources
Can any of the company-specific risk be diversified away by investing in both Precious Metals 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 Precious Metals and NovaGold Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Precious Metals And and NovaGold Resources, you can compare the effects of market volatilities on Precious Metals 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 Precious Metals with a short position of NovaGold Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precious Metals and NovaGold Resources.
Diversification Opportunities for Precious Metals and NovaGold Resources
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Precious and NovaGold is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Precious Metals And and NovaGold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NovaGold Resources and Precious Metals 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 Precious Metals And 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 Precious Metals i.e., Precious Metals and NovaGold Resources go up and down completely randomly.
Pair Corralation between Precious Metals and NovaGold Resources
Assuming the 90 days trading horizon Precious Metals And is expected to generate 0.56 times more return on investment than NovaGold Resources. However, Precious Metals And is 1.79 times less risky than NovaGold Resources. It trades about 0.05 of its potential returns per unit of risk. NovaGold Resources is currently generating about -0.05 per unit of risk. If you would invest 189.00 in Precious Metals And on December 1, 2024 and sell it today you would earn a total of 3.00 from holding Precious Metals And or generate 1.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Precious Metals And vs. NovaGold Resources
Performance |
| Timeline |
| Precious Metals And |
| NovaGold Resources |
Precious Metals and NovaGold Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Precious Metals and NovaGold Resources
The main advantage of trading using opposite Precious Metals and NovaGold Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precious Metals 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.| Precious Metals vs. Algonquin Power Utilities | Precious Metals vs. InPlay Oil Corp | Precious Metals vs. Guru Organic Energy | Precious Metals vs. Black Mammoth Metals |
| NovaGold Resources vs. Centerra Gold | NovaGold Resources vs. Alamos Gold | NovaGold Resources vs. MAG Silver Corp | NovaGold Resources vs. Seabridge Gold |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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