Correlation Between NovaGold Resources and Dakota Gold
Can any of the company-specific risk be diversified away by investing in both NovaGold Resources and Dakota 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 Dakota 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 Dakota Gold Corp, you can compare the effects of market volatilities on NovaGold Resources and Dakota 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 Dakota Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of NovaGold Resources and Dakota Gold.
Diversification Opportunities for NovaGold Resources and Dakota Gold
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NovaGold and Dakota is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding NovaGold Resources and Dakota Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dakota 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 Dakota Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dakota Gold Corp has no effect on the direction of NovaGold Resources i.e., NovaGold Resources and Dakota Gold go up and down completely randomly.
Pair Corralation between NovaGold Resources and Dakota Gold
Allowing for the 90-day total investment horizon NovaGold Resources is expected to under-perform the Dakota Gold. In addition to that, NovaGold Resources is 1.16 times more volatile than Dakota Gold Corp. It trades about -0.06 of its total potential returns per unit of risk. Dakota Gold Corp is currently generating about 0.02 per unit of volatility. If you would invest 218.00 in Dakota Gold Corp on November 2, 2024 and sell it today you would earn a total of 7.00 from holding Dakota Gold Corp or generate 3.21% 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. Dakota Gold Corp
Performance |
| Timeline |
| NovaGold Resources |
| Dakota Gold Corp |
NovaGold Resources and Dakota Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NovaGold Resources and Dakota Gold
The main advantage of trading using opposite NovaGold Resources and Dakota Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NovaGold Resources position performs unexpectedly, Dakota 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 Dakota Gold will offset losses from the drop in Dakota Gold's long position.| NovaGold Resources vs. Seabridge Gold | NovaGold Resources vs. Eldorado Gold Corp | NovaGold Resources vs. New Gold | NovaGold Resources vs. IAMGold |
| Dakota Gold vs. Osisko Development Corp | Dakota Gold vs. Osisko Development Corp | Dakota Gold vs. Gold Royalty Corp | Dakota Gold vs. Carbon Streaming 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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