Correlation Between NOVAGOLD RESOURCES and AAC TECHNOLOGHLDGADR
Can any of the company-specific risk be diversified away by investing in both NOVAGOLD RESOURCES and AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NOVAGOLD RESOURCES and AAC TECHNOLOGHLDGADR, you can compare the effects of market volatilities on NOVAGOLD RESOURCES and AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of NOVAGOLD RESOURCES and AAC TECHNOLOGHLDGADR.
Diversification Opportunities for NOVAGOLD RESOURCES and AAC TECHNOLOGHLDGADR
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between NOVAGOLD and AAC is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding NOVAGOLD RESOURCES and AAC TECHNOLOGHLDGADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAC TECHNOLOGHLDGADR has no effect on the direction of NOVAGOLD RESOURCES i.e., NOVAGOLD RESOURCES and AAC TECHNOLOGHLDGADR go up and down completely randomly.
Pair Corralation between NOVAGOLD RESOURCES and AAC TECHNOLOGHLDGADR
Assuming the 90 days trading horizon NOVAGOLD RESOURCES is expected to generate 0.56 times more return on investment than AAC TECHNOLOGHLDGADR. However, NOVAGOLD RESOURCES is 1.79 times less risky than AAC TECHNOLOGHLDGADR. It trades about 0.15 of its potential returns per unit of risk. AAC TECHNOLOGHLDGADR is currently generating about 0.02 per unit of risk. If you would invest 321.00 in NOVAGOLD RESOURCES on October 15, 2024 and sell it today you would earn a total of 13.00 from holding NOVAGOLD RESOURCES or generate 4.05% 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. AAC TECHNOLOGHLDGADR
Performance |
| Timeline |
| NOVAGOLD RESOURCES |
| AAC TECHNOLOGHLDGADR |
NOVAGOLD RESOURCES and AAC TECHNOLOGHLDGADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NOVAGOLD RESOURCES and AAC TECHNOLOGHLDGADR
The main advantage of trading using opposite NOVAGOLD RESOURCES and AAC TECHNOLOGHLDGADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NOVAGOLD RESOURCES position performs unexpectedly, AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR will offset losses from the drop in AAC TECHNOLOGHLDGADR's long position.| NOVAGOLD RESOURCES vs. The Home Depot | NOVAGOLD RESOURCES vs. COMBA TELECOM SYST | NOVAGOLD RESOURCES vs. Shenandoah Telecommunications | NOVAGOLD RESOURCES vs. Cairo Communication SpA |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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