Correlation Between CLEAN ENERGY and NOVAGOLD RESOURCES
Can any of the company-specific risk be diversified away by investing in both CLEAN ENERGY 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 CLEAN ENERGY and NOVAGOLD RESOURCES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CLEAN ENERGY FUELS and NOVAGOLD RESOURCES, you can compare the effects of market volatilities on CLEAN ENERGY 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 CLEAN ENERGY with a short position of NOVAGOLD RESOURCES. Check out your portfolio center. Please also check ongoing floating volatility patterns of CLEAN ENERGY and NOVAGOLD RESOURCES.
Diversification Opportunities for CLEAN ENERGY and NOVAGOLD RESOURCES
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CLEAN and NOVAGOLD is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding CLEAN ENERGY FUELS and NOVAGOLD RESOURCES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOVAGOLD RESOURCES and CLEAN ENERGY 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 CLEAN ENERGY FUELS 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 CLEAN ENERGY i.e., CLEAN ENERGY and NOVAGOLD RESOURCES go up and down completely randomly.
Pair Corralation between CLEAN ENERGY and NOVAGOLD RESOURCES
Assuming the 90 days trading horizon CLEAN ENERGY FUELS is expected to generate 0.91 times more return on investment than NOVAGOLD RESOURCES. However, CLEAN ENERGY FUELS is 1.1 times less risky than NOVAGOLD RESOURCES. It trades about 0.21 of its potential returns per unit of risk. NOVAGOLD RESOURCES is currently generating about -0.02 per unit of risk. If you would invest 262.00 in CLEAN ENERGY FUELS on October 12, 2024 and sell it today you would earn a total of 30.00 from holding CLEAN ENERGY FUELS or generate 11.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
CLEAN ENERGY FUELS vs. NOVAGOLD RESOURCES
Performance |
| Timeline |
| CLEAN ENERGY FUELS |
| NOVAGOLD RESOURCES |
CLEAN ENERGY and NOVAGOLD RESOURCES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CLEAN ENERGY and NOVAGOLD RESOURCES
The main advantage of trading using opposite CLEAN ENERGY and NOVAGOLD RESOURCES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CLEAN ENERGY 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.| CLEAN ENERGY vs. SENECA FOODS A | CLEAN ENERGY vs. MeVis Medical Solutions | CLEAN ENERGY vs. SPECTRAL MEDICAL | CLEAN ENERGY vs. Advanced Medical Solutions |
| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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