Correlation Between NovaGold Resources and Bank of Montreal
Can any of the company-specific risk be diversified away by investing in both NovaGold Resources and Bank of Montreal 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 Bank of Montreal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NovaGold Resources and Bank of Montreal, you can compare the effects of market volatilities on NovaGold Resources and Bank of Montreal 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 Bank of Montreal. Check out your portfolio center. Please also check ongoing floating volatility patterns of NovaGold Resources and Bank of Montreal.
Diversification Opportunities for NovaGold Resources and Bank of Montreal
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NovaGold and Bank is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding NovaGold Resources and Bank of Montreal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Montreal 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 Bank of Montreal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Montreal has no effect on the direction of NovaGold Resources i.e., NovaGold Resources and Bank of Montreal go up and down completely randomly.
Pair Corralation between NovaGold Resources and Bank of Montreal
Assuming the 90 days horizon NovaGold Resources is expected to generate 8.08 times less return on investment than Bank of Montreal. In addition to that, NovaGold Resources is 2.82 times more volatile than Bank of Montreal. It trades about 0.0 of its total potential returns per unit of risk. Bank of Montreal is currently generating about 0.06 per unit of volatility. If you would invest 11,477 in Bank of Montreal on September 12, 2024 and sell it today you would earn a total of 2,810 from holding Bank of Montreal or generate 24.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NovaGold Resources vs. Bank of Montreal
Performance |
| Timeline |
| NovaGold Resources |
| Bank of Montreal |
NovaGold Resources and Bank of Montreal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NovaGold Resources and Bank of Montreal
The main advantage of trading using opposite NovaGold Resources and Bank of Montreal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NovaGold Resources position performs unexpectedly, Bank of Montreal 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 Bank of Montreal will offset losses from the drop in Bank of Montreal's long position.| NovaGold Resources vs. Centerra Gold | NovaGold Resources vs. Alamos Gold | NovaGold Resources vs. MAG Silver Corp | NovaGold Resources vs. Seabridge Gold |
| Bank of Montreal vs. Royal Bank of | Bank of Montreal vs. Canadian Imperial Bank | Bank of Montreal vs. Bank of Nova | Bank of Montreal vs. Toronto Dominion Bank |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |