Correlation Between NovaGold Resources and Gatekeeper Systems
Can any of the company-specific risk be diversified away by investing in both NovaGold Resources and Gatekeeper Systems 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 Gatekeeper Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NovaGold Resources and Gatekeeper Systems, you can compare the effects of market volatilities on NovaGold Resources and Gatekeeper Systems 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 Gatekeeper Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of NovaGold Resources and Gatekeeper Systems.
Diversification Opportunities for NovaGold Resources and Gatekeeper Systems
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NovaGold and Gatekeeper is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding NovaGold Resources and Gatekeeper Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gatekeeper Systems 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 Gatekeeper Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gatekeeper Systems has no effect on the direction of NovaGold Resources i.e., NovaGold Resources and Gatekeeper Systems go up and down completely randomly.
Pair Corralation between NovaGold Resources and Gatekeeper Systems
Assuming the 90 days horizon NovaGold Resources is expected to generate 3.4 times less return on investment than Gatekeeper Systems. But when comparing it to its historical volatility, NovaGold Resources is 1.18 times less risky than Gatekeeper Systems. It trades about 0.02 of its potential returns per unit of risk. Gatekeeper Systems is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 38.00 in Gatekeeper Systems on August 29, 2024 and sell it today you would earn a total of 30.00 from holding Gatekeeper Systems or generate 78.95% 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. Gatekeeper Systems
Performance |
| Timeline |
| NovaGold Resources |
| Gatekeeper Systems |
NovaGold Resources and Gatekeeper Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NovaGold Resources and Gatekeeper Systems
The main advantage of trading using opposite NovaGold Resources and Gatekeeper Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NovaGold Resources position performs unexpectedly, Gatekeeper Systems 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 Gatekeeper Systems will offset losses from the drop in Gatekeeper Systems' long position.| NovaGold Resources vs. First Majestic Silver | NovaGold Resources vs. Ivanhoe Energy | NovaGold Resources vs. Orezone Gold Corp | NovaGold Resources vs. Faraday Copper Corp |
| Gatekeeper Systems vs. AnalytixInsight | Gatekeeper Systems vs. Kraken Robotics | Gatekeeper Systems vs. ARHT Media |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |