Correlation Between NOVAGOLD RESOURCES and PTT Global
Can any of the company-specific risk be diversified away by investing in both NOVAGOLD RESOURCES and PTT Global 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 PTT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NOVAGOLD RESOURCES and PTT Global Chemical, you can compare the effects of market volatilities on NOVAGOLD RESOURCES and PTT Global 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 PTT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of NOVAGOLD RESOURCES and PTT Global.
Diversification Opportunities for NOVAGOLD RESOURCES and PTT Global
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NOVAGOLD and PTT is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding NOVAGOLD RESOURCES and PTT Global Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTT Global Chemical 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 PTT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTT Global Chemical has no effect on the direction of NOVAGOLD RESOURCES i.e., NOVAGOLD RESOURCES and PTT Global go up and down completely randomly.
Pair Corralation between NOVAGOLD RESOURCES and PTT Global
Assuming the 90 days trading horizon NOVAGOLD RESOURCES is expected to generate 1.7 times more return on investment than PTT Global. However, NOVAGOLD RESOURCES is 1.7 times more volatile than PTT Global Chemical. It trades about -0.1 of its potential returns per unit of risk. PTT Global Chemical is currently generating about -0.33 per unit of risk. If you would invest 341.00 in NOVAGOLD RESOURCES on September 24, 2024 and sell it today you would lose (26.00) from holding NOVAGOLD RESOURCES or give up 7.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
NOVAGOLD RESOURCES vs. PTT Global Chemical
Performance |
| Timeline |
| NOVAGOLD RESOURCES |
| PTT Global Chemical |
NOVAGOLD RESOURCES and PTT Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NOVAGOLD RESOURCES and PTT Global
The main advantage of trading using opposite NOVAGOLD RESOURCES and PTT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NOVAGOLD RESOURCES position performs unexpectedly, PTT Global 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 PTT Global will offset losses from the drop in PTT Global's long position.| NOVAGOLD RESOURCES vs. PTT Global Chemical | NOVAGOLD RESOURCES vs. MEDICAL FACILITIES NEW | NOVAGOLD RESOURCES vs. Siamgas And Petrochemicals | NOVAGOLD RESOURCES vs. Silicon Motion Technology |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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