Correlation Between NovaGold Resources and Cybin
Can any of the company-specific risk be diversified away by investing in both NovaGold Resources and Cybin 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 Cybin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NovaGold Resources and Cybin Inc, you can compare the effects of market volatilities on NovaGold Resources and Cybin 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 Cybin. Check out your portfolio center. Please also check ongoing floating volatility patterns of NovaGold Resources and Cybin.
Diversification Opportunities for NovaGold Resources and Cybin
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NovaGold and Cybin is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding NovaGold Resources and Cybin Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cybin Inc 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 Cybin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cybin Inc has no effect on the direction of NovaGold Resources i.e., NovaGold Resources and Cybin go up and down completely randomly.
Pair Corralation between NovaGold Resources and Cybin
Assuming the 90 days horizon NovaGold Resources is expected to generate 4.71 times less return on investment than Cybin. But when comparing it to its historical volatility, NovaGold Resources is 2.43 times less risky than Cybin. It trades about 0.02 of its potential returns per unit of risk. Cybin Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,460 in Cybin Inc on August 27, 2024 and sell it today you would earn a total of 15.00 from holding Cybin Inc or generate 1.03% 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. Cybin Inc
Performance |
| Timeline |
| NovaGold Resources |
| Cybin Inc |
NovaGold Resources and Cybin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NovaGold Resources and Cybin
The main advantage of trading using opposite NovaGold Resources and Cybin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NovaGold Resources position performs unexpectedly, Cybin 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 Cybin will offset losses from the drop in Cybin's long position.| NovaGold Resources vs. Centerra Gold | NovaGold Resources vs. Alamos Gold | NovaGold Resources vs. MAG Silver Corp | NovaGold Resources vs. Seabridge Gold |
| Cybin vs. Questor Technology | Cybin vs. Caribbean Utilities | Cybin vs. Richelieu Hardware | Cybin vs. Renoworks Software |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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