Correlation Between NovaGold Resources and Rockhaven Resources
Can any of the company-specific risk be diversified away by investing in both NovaGold Resources and Rockhaven 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 Rockhaven 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 Rockhaven Resources, you can compare the effects of market volatilities on NovaGold Resources and Rockhaven 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 Rockhaven Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of NovaGold Resources and Rockhaven Resources.
Diversification Opportunities for NovaGold Resources and Rockhaven Resources
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between NovaGold and Rockhaven is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding NovaGold Resources and Rockhaven Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rockhaven 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 Rockhaven Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rockhaven Resources has no effect on the direction of NovaGold Resources i.e., NovaGold Resources and Rockhaven Resources go up and down completely randomly.
Pair Corralation between NovaGold Resources and Rockhaven Resources
Assuming the 90 days horizon NovaGold Resources is expected to under-perform the Rockhaven Resources. But the stock apears to be less risky and, when comparing its historical volatility, NovaGold Resources is 2.18 times less risky than Rockhaven Resources. The stock trades about -0.02 of its potential returns per unit of risk. The Rockhaven Resources is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6.00 in Rockhaven Resources on November 28, 2024 and sell it today you would earn a total of 1.00 from holding Rockhaven Resources or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NovaGold Resources vs. Rockhaven Resources
Performance |
| Timeline |
| NovaGold Resources |
| Rockhaven Resources |
NovaGold Resources and Rockhaven Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NovaGold Resources and Rockhaven Resources
The main advantage of trading using opposite NovaGold Resources and Rockhaven Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NovaGold Resources position performs unexpectedly, Rockhaven 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 Rockhaven Resources will offset losses from the drop in Rockhaven Resources' long position.| NovaGold Resources vs. Centerra Gold | NovaGold Resources vs. Alamos Gold | NovaGold Resources vs. MAG Silver Corp | NovaGold Resources vs. Seabridge Gold |
| Rockhaven Resources vs. Independence Gold Corp | Rockhaven Resources vs. Avrupa Minerals | Rockhaven Resources vs. Tristar Gold | Rockhaven Resources vs. Thunderstruck 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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