Correlation Between NovaGold Resources and Sulliden Minerals
Can any of the company-specific risk be diversified away by investing in both NovaGold Resources and Sulliden Minerals 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 Sulliden Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NovaGold Resources and Sulliden Minerals SA, you can compare the effects of market volatilities on NovaGold Resources and Sulliden Minerals 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 Sulliden Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of NovaGold Resources and Sulliden Minerals.
Diversification Opportunities for NovaGold Resources and Sulliden Minerals
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NovaGold and Sulliden is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding NovaGold Resources and Sulliden Minerals SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sulliden Minerals 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 Sulliden Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sulliden Minerals has no effect on the direction of NovaGold Resources i.e., NovaGold Resources and Sulliden Minerals go up and down completely randomly.
Pair Corralation between NovaGold Resources and Sulliden Minerals
Assuming the 90 days horizon NovaGold Resources is expected to generate 8.43 times less return on investment than Sulliden Minerals. But when comparing it to its historical volatility, NovaGold Resources is 3.62 times less risky than Sulliden Minerals. It trades about 0.02 of its potential returns per unit of risk. Sulliden Minerals SA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3.50 in Sulliden Minerals SA on September 4, 2024 and sell it today you would lose (1.50) from holding Sulliden Minerals SA or give up 42.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NovaGold Resources vs. Sulliden Minerals SA
Performance |
| Timeline |
| NovaGold Resources |
| Sulliden Minerals |
NovaGold Resources and Sulliden Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NovaGold Resources and Sulliden Minerals
The main advantage of trading using opposite NovaGold Resources and Sulliden Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NovaGold Resources position performs unexpectedly, Sulliden Minerals 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 Sulliden Minerals will offset losses from the drop in Sulliden Minerals' long position.| NovaGold Resources vs. Centerra Gold | NovaGold Resources vs. Alamos Gold | NovaGold Resources vs. MAG Silver Corp | NovaGold Resources vs. Seabridge Gold |
| Sulliden Minerals vs. First Majestic Silver | Sulliden Minerals vs. Ivanhoe Energy | Sulliden Minerals vs. Orezone Gold Corp | Sulliden Minerals vs. Faraday Copper Corp |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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