Correlation Between NovaGold Resources and Flinders Resources
Can any of the company-specific risk be diversified away by investing in both NovaGold Resources and Flinders 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 NovaGold Resources and Flinders Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NovaGold Resources and Flinders Resources Limited, you can compare the effects of market volatilities on NovaGold Resources and Flinders 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 NovaGold Resources with a short position of Flinders Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of NovaGold Resources and Flinders Resources.
Diversification Opportunities for NovaGold Resources and Flinders Resources
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NovaGold and Flinders is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding NovaGold Resources and Flinders Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flinders Resources 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 Flinders Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flinders Resources has no effect on the direction of NovaGold Resources i.e., NovaGold Resources and Flinders Resources go up and down completely randomly.
Pair Corralation between NovaGold Resources and Flinders Resources
Assuming the 90 days horizon NovaGold Resources is expected to under-perform the Flinders Resources. But the stock apears to be less risky and, when comparing its historical volatility, NovaGold Resources is 1.94 times less risky than Flinders Resources. The stock trades about -0.16 of its potential returns per unit of risk. The Flinders Resources Limited is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 507.00 in Flinders Resources Limited on November 3, 2024 and sell it today you would earn a total of 63.00 from holding Flinders Resources Limited or generate 12.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NovaGold Resources vs. Flinders Resources Limited
Performance |
| Timeline |
| NovaGold Resources |
| Flinders Resources |
NovaGold Resources and Flinders Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NovaGold Resources and Flinders Resources
The main advantage of trading using opposite NovaGold Resources and Flinders Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NovaGold Resources position performs unexpectedly, Flinders 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 Flinders Resources will offset losses from the drop in Flinders Resources' long position.| NovaGold Resources vs. Centerra Gold | NovaGold Resources vs. Alamos Gold | NovaGold Resources vs. MAG Silver Corp | NovaGold Resources vs. Seabridge Gold |
| Flinders Resources vs. IAMGold | Flinders Resources vs. Eldorado Gold Corp | Flinders Resources vs. Alamos Gold | Flinders Resources vs. NovaGold Resources |
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 CEOs Directory module to screen CEOs from public companies around the world.
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