Correlation Between Orezone Gold and NovaGold Resources
Can any of the company-specific risk be diversified away by investing in both Orezone 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 Orezone 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 Orezone Gold Corp and NovaGold Resources, you can compare the effects of market volatilities on Orezone 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 Orezone Gold with a short position of NovaGold Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orezone Gold and NovaGold Resources.
Diversification Opportunities for Orezone Gold and NovaGold Resources
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Orezone and NovaGold is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Orezone Gold Corp and NovaGold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NovaGold Resources and Orezone 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 Orezone Gold Corp 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 Orezone Gold i.e., Orezone Gold and NovaGold Resources go up and down completely randomly.
Pair Corralation between Orezone Gold and NovaGold Resources
Assuming the 90 days trading horizon Orezone Gold Corp is expected to under-perform the NovaGold Resources. In addition to that, Orezone Gold is 1.12 times more volatile than NovaGold Resources. It trades about 0.0 of its total potential returns per unit of risk. NovaGold Resources is currently generating about 0.08 per unit of volatility. If you would invest 342.00 in NovaGold Resources on September 1, 2024 and sell it today you would earn a total of 173.00 from holding NovaGold Resources or generate 50.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orezone Gold Corp vs. NovaGold Resources
Performance |
| Timeline |
| Orezone Gold Corp |
| NovaGold Resources |
Orezone Gold and NovaGold Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orezone Gold and NovaGold Resources
The main advantage of trading using opposite Orezone Gold and NovaGold Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orezone 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.| Orezone Gold vs. i 80 Gold Corp | Orezone Gold vs. Perseus Mining | Orezone Gold vs. K92 Mining | Orezone Gold vs. GoGold Resources |
| NovaGold Resources vs. Centerra Gold | NovaGold Resources vs. Alamos Gold | NovaGold Resources vs. MAG Silver Corp | NovaGold Resources vs. Seabridge Gold |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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