Correlation Between Pembina Pipeline and NOVAGOLD RESOURCES
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline 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 Pembina Pipeline and NOVAGOLD RESOURCES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pembina Pipeline Corp and NOVAGOLD RESOURCES, you can compare the effects of market volatilities on Pembina Pipeline 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 Pembina Pipeline with a short position of NOVAGOLD RESOURCES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and NOVAGOLD RESOURCES.
Diversification Opportunities for Pembina Pipeline and NOVAGOLD RESOURCES
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pembina and NOVAGOLD is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and NOVAGOLD RESOURCES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOVAGOLD RESOURCES and Pembina Pipeline 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 Pembina Pipeline 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 Pembina Pipeline i.e., Pembina Pipeline and NOVAGOLD RESOURCES go up and down completely randomly.
Pair Corralation between Pembina Pipeline and NOVAGOLD RESOURCES
Assuming the 90 days horizon Pembina Pipeline Corp is expected to under-perform the NOVAGOLD RESOURCES. But the stock apears to be less risky and, when comparing its historical volatility, Pembina Pipeline Corp is 3.02 times less risky than NOVAGOLD RESOURCES. The stock trades about -0.1 of its potential returns per unit of risk. The NOVAGOLD RESOURCES is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 331.00 in NOVAGOLD RESOURCES on October 12, 2024 and sell it today you would lose (7.00) from holding NOVAGOLD RESOURCES or give up 2.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Pembina Pipeline Corp vs. NOVAGOLD RESOURCES
Performance |
| Timeline |
| Pembina Pipeline Corp |
| NOVAGOLD RESOURCES |
Pembina Pipeline and NOVAGOLD RESOURCES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembina Pipeline and NOVAGOLD RESOURCES
The main advantage of trading using opposite Pembina Pipeline and NOVAGOLD RESOURCES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline 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's long position.| Pembina Pipeline vs. MAGNUM MINING EXP | Pembina Pipeline vs. MACOM Technology Solutions | Pembina Pipeline vs. ARDAGH METAL PACDL 0001 | Pembina Pipeline vs. PKSHA TECHNOLOGY INC |
| NOVAGOLD RESOURCES vs. Pembina Pipeline Corp | NOVAGOLD RESOURCES vs. CLEAN ENERGY FUELS | NOVAGOLD RESOURCES vs. CVW CLEANTECH INC | NOVAGOLD RESOURCES vs. Delta Electronics Public |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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