Correlation Between Osisko Gold and NovaGold Resources
Can any of the company-specific risk be diversified away by investing in both Osisko Gold and NovaGold Resources 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 Osisko Gold and NovaGold Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Osisko Gold Ro and NovaGold Resources, you can compare the effects of market volatilities on Osisko Gold and NovaGold Resources 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 Osisko Gold with a short position of NovaGold Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Osisko Gold and NovaGold Resources.
Diversification Opportunities for Osisko Gold and NovaGold Resources
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Osisko and NovaGold is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Osisko Gold Ro and NovaGold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NovaGold Resources and Osisko Gold 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 Osisko Gold Ro are associated (or correlated) with NovaGold Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NovaGold Resources has no effect on the direction of Osisko Gold i.e., Osisko Gold and NovaGold Resources go up and down completely randomly.
Pair Corralation between Osisko Gold and NovaGold Resources
Assuming the 90 days horizon Osisko Gold Ro is expected to under-perform the NovaGold Resources. But the stock apears to be less risky and, when comparing its historical volatility, Osisko Gold Ro is 1.1 times less risky than NovaGold Resources. The stock trades about -0.06 of its potential returns per unit of risk. The NovaGold Resources is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 481.00 in NovaGold Resources on September 1, 2024 and sell it today you would earn a total of 34.00 from holding NovaGold Resources or generate 7.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Osisko Gold Ro vs. NovaGold Resources
Performance |
| Timeline |
| Osisko Gold Ro |
| NovaGold Resources |
Osisko Gold and NovaGold Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Osisko Gold and NovaGold Resources
The main advantage of trading using opposite Osisko Gold and NovaGold Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Osisko Gold position performs unexpectedly, NovaGold Resources 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 NovaGold Resources will offset losses from the drop in NovaGold Resources' long position.| Osisko Gold vs. Sandstorm Gold Ltd | Osisko Gold vs. SSR Mining | Osisko Gold vs. MAG Silver Corp | Osisko Gold vs. Pan American Silver |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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