Correlation Between NOVAGOLD RESOURCES and ATT
Can any of the company-specific risk be diversified away by investing in both NOVAGOLD RESOURCES and ATT 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 NOVAGOLD RESOURCES and ATT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NOVAGOLD RESOURCES and ATT Inc, you can compare the effects of market volatilities on NOVAGOLD RESOURCES and ATT 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 NOVAGOLD RESOURCES with a short position of ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of NOVAGOLD RESOURCES and ATT.
Diversification Opportunities for NOVAGOLD RESOURCES and ATT
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NOVAGOLD and ATT is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding NOVAGOLD RESOURCES and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc and NOVAGOLD RESOURCES 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 NOVAGOLD RESOURCES are associated (or correlated) with ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of NOVAGOLD RESOURCES i.e., NOVAGOLD RESOURCES and ATT go up and down completely randomly.
Pair Corralation between NOVAGOLD RESOURCES and ATT
Assuming the 90 days trading horizon NOVAGOLD RESOURCES is expected to generate 4.87 times more return on investment than ATT. However, NOVAGOLD RESOURCES is 4.87 times more volatile than ATT Inc. It trades about 0.23 of its potential returns per unit of risk. ATT Inc is currently generating about -0.12 per unit of risk. If you would invest 238.00 in NOVAGOLD RESOURCES on January 20, 2024 and sell it today you would earn a total of 52.00 from holding NOVAGOLD RESOURCES or generate 21.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
NOVAGOLD RESOURCES vs. ATT Inc
Performance |
| Timeline |
| NOVAGOLD RESOURCES |
| ATT Inc |
NOVAGOLD RESOURCES and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NOVAGOLD RESOURCES and ATT
The main advantage of trading using opposite NOVAGOLD RESOURCES and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NOVAGOLD RESOURCES position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.| NOVAGOLD RESOURCES vs. CanSino Biologics | NOVAGOLD RESOURCES vs. TEXAS ROADHOUSE | NOVAGOLD RESOURCES vs. Kaufman Broad SA | NOVAGOLD RESOURCES vs. EVS Broadcast Equipment |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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