Correlation Between NovaGold Resources and TNR Gold
Can any of the company-specific risk be diversified away by investing in both NovaGold Resources and TNR Gold 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 TNR Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NovaGold Resources and TNR Gold Corp, you can compare the effects of market volatilities on NovaGold Resources and TNR Gold 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 TNR Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of NovaGold Resources and TNR Gold.
Diversification Opportunities for NovaGold Resources and TNR Gold
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NovaGold and TNR is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding NovaGold Resources and TNR Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TNR Gold Corp 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 TNR Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TNR Gold Corp has no effect on the direction of NovaGold Resources i.e., NovaGold Resources and TNR Gold go up and down completely randomly.
Pair Corralation between NovaGold Resources and TNR Gold
Assuming the 90 days horizon NovaGold Resources is expected to generate 0.52 times more return on investment than TNR Gold. However, NovaGold Resources is 1.93 times less risky than TNR Gold. It trades about 0.05 of its potential returns per unit of risk. TNR Gold Corp is currently generating about 0.02 per unit of risk. If you would invest 489.00 in NovaGold Resources on September 4, 2024 and sell it today you would earn a total of 10.00 from holding NovaGold Resources or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
NovaGold Resources vs. TNR Gold Corp
Performance |
| Timeline |
| NovaGold Resources |
| TNR Gold Corp |
NovaGold Resources and TNR Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NovaGold Resources and TNR Gold
The main advantage of trading using opposite NovaGold Resources and TNR Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NovaGold Resources position performs unexpectedly, TNR Gold 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 TNR Gold will offset losses from the drop in TNR Gold's long position.| NovaGold Resources vs. Centerra Gold | NovaGold Resources vs. Alamos Gold | NovaGold Resources vs. MAG Silver Corp | NovaGold Resources vs. Seabridge Gold |
| TNR Gold vs. First Majestic Silver | TNR Gold vs. Ivanhoe Energy | TNR Gold vs. Orezone Gold Corp | TNR Gold 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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