Correlation Between CVW CLEANTECH and NOVAGOLD RESOURCES
Can any of the company-specific risk be diversified away by investing in both CVW CLEANTECH 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 CVW CLEANTECH and NOVAGOLD RESOURCES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVW CLEANTECH INC and NOVAGOLD RESOURCES, you can compare the effects of market volatilities on CVW CLEANTECH 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 CVW CLEANTECH with a short position of NOVAGOLD RESOURCES. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CLEANTECH and NOVAGOLD RESOURCES.
Diversification Opportunities for CVW CLEANTECH and NOVAGOLD RESOURCES
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CVW and NOVAGOLD is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding CVW CLEANTECH INC and NOVAGOLD RESOURCES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOVAGOLD RESOURCES and CVW CLEANTECH 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 CVW CLEANTECH INC 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 CVW CLEANTECH i.e., CVW CLEANTECH and NOVAGOLD RESOURCES go up and down completely randomly.
Pair Corralation between CVW CLEANTECH and NOVAGOLD RESOURCES
Assuming the 90 days trading horizon CVW CLEANTECH INC is expected to generate 1.1 times more return on investment than NOVAGOLD RESOURCES. However, CVW CLEANTECH is 1.1 times more volatile than NOVAGOLD RESOURCES. It trades about -0.01 of its potential returns per unit of risk. NOVAGOLD RESOURCES is currently generating about -0.02 per unit of risk. If you would invest 60.00 in CVW CLEANTECH INC on October 12, 2024 and sell it today you would lose (1.00) from holding CVW CLEANTECH INC or give up 1.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVW CLEANTECH INC vs. NOVAGOLD RESOURCES
Performance |
| Timeline |
| CVW CLEANTECH INC |
| NOVAGOLD RESOURCES |
CVW CLEANTECH and NOVAGOLD RESOURCES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVW CLEANTECH and NOVAGOLD RESOURCES
The main advantage of trading using opposite CVW CLEANTECH and NOVAGOLD RESOURCES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CLEANTECH 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.| CVW CLEANTECH vs. Western Copper and | CVW CLEANTECH vs. MAGNUM MINING EXP | CVW CLEANTECH vs. HYATT HOTELS A | CVW CLEANTECH vs. ARDAGH METAL PACDL 0001 |
| 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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