Correlation Between NovaGold Resources and Alamos Gold
Can any of the company-specific risk be diversified away by investing in both NovaGold Resources and Alamos Gold 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 NovaGold Resources and Alamos Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NovaGold Resources and Alamos Gold, you can compare the effects of market volatilities on NovaGold Resources and Alamos Gold 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 NovaGold Resources with a short position of Alamos Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of NovaGold Resources and Alamos Gold.
Diversification Opportunities for NovaGold Resources and Alamos Gold
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between NovaGold and Alamos is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding NovaGold Resources and Alamos Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alamos Gold and NovaGold Resources 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 NovaGold Resources are associated (or correlated) with Alamos Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alamos Gold has no effect on the direction of NovaGold Resources i.e., NovaGold Resources and Alamos Gold go up and down completely randomly.
Pair Corralation between NovaGold Resources and Alamos Gold
Assuming the 90 days horizon NovaGold Resources is expected to generate 1.26 times more return on investment than Alamos Gold. However, NovaGold Resources is 1.26 times more volatile than Alamos Gold. It trades about -0.01 of its potential returns per unit of risk. Alamos Gold is currently generating about -0.21 per unit of risk. If you would invest 514.00 in NovaGold Resources on August 25, 2024 and sell it today you would lose (7.00) from holding NovaGold Resources or give up 1.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NovaGold Resources vs. Alamos Gold
Performance |
| Timeline |
| NovaGold Resources |
| Alamos Gold |
NovaGold Resources and Alamos Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NovaGold Resources and Alamos Gold
The main advantage of trading using opposite NovaGold Resources and Alamos Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NovaGold Resources position performs unexpectedly, Alamos Gold 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 Alamos Gold will offset losses from the drop in Alamos Gold's long position.| NovaGold Resources vs. Plato Gold Corp | NovaGold Resources vs. Rochester Resources | NovaGold Resources vs. Forstrong Global Income | NovaGold Resources vs. Terreno Resources Corp |
| Alamos Gold vs. High Liner Foods | Alamos Gold vs. Definity Financial Corp | Alamos Gold vs. Rubicon Organics | Alamos Gold vs. Everyday People Financial |
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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