Correlation Between State Bank and NOVAGOLD RESOURCES
Can any of the company-specific risk be diversified away by investing in both State Bank 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 State Bank and NOVAGOLD RESOURCES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Bank of and NOVAGOLD RESOURCES, you can compare the effects of market volatilities on State Bank 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 State Bank with a short position of NOVAGOLD RESOURCES. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and NOVAGOLD RESOURCES.
Diversification Opportunities for State Bank and NOVAGOLD RESOURCES
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between State and NOVAGOLD is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and NOVAGOLD RESOURCES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOVAGOLD RESOURCES and State Bank 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 State Bank of 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 State Bank i.e., State Bank and NOVAGOLD RESOURCES go up and down completely randomly.
Pair Corralation between State Bank and NOVAGOLD RESOURCES
Assuming the 90 days horizon State Bank of is expected to generate 0.53 times more return on investment than NOVAGOLD RESOURCES. However, State Bank of is 1.9 times less risky than NOVAGOLD RESOURCES. It trades about 0.05 of its potential returns per unit of risk. NOVAGOLD RESOURCES is currently generating about -0.02 per unit of risk. If you would invest 5,669 in State Bank of on December 6, 2024 and sell it today you would earn a total of 2,181 from holding State Bank of or generate 38.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
State Bank of vs. NOVAGOLD RESOURCES
Performance |
| Timeline |
| State Bank |
| NOVAGOLD RESOURCES |
State Bank and NOVAGOLD RESOURCES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and NOVAGOLD RESOURCES
The main advantage of trading using opposite State Bank and NOVAGOLD RESOURCES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank 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.| State Bank vs. JLF INVESTMENT | State Bank vs. GOLDQUEST MINING | State Bank vs. RESMINING UNSPADR10 | State Bank vs. PennantPark Investment |
| NOVAGOLD RESOURCES vs. Air Transport Services | NOVAGOLD RESOURCES vs. UNIVMUSIC GRPADR050 | NOVAGOLD RESOURCES vs. MOLSON RS BEVERAGE | NOVAGOLD RESOURCES vs. ADRIATIC METALS LS 013355 |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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