Correlation Between NovaGold Resources and Ritchie Bros
Can any of the company-specific risk be diversified away by investing in both NovaGold Resources and Ritchie Bros 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 Ritchie Bros into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NovaGold Resources and Ritchie Bros Auctioneers, you can compare the effects of market volatilities on NovaGold Resources and Ritchie Bros 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 Ritchie Bros. Check out your portfolio center. Please also check ongoing floating volatility patterns of NovaGold Resources and Ritchie Bros.
Diversification Opportunities for NovaGold Resources and Ritchie Bros
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NovaGold and Ritchie is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding NovaGold Resources and Ritchie Bros Auctioneers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ritchie Bros Auctioneers 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 Ritchie Bros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ritchie Bros Auctioneers has no effect on the direction of NovaGold Resources i.e., NovaGold Resources and Ritchie Bros go up and down completely randomly.
Pair Corralation between NovaGold Resources and Ritchie Bros
Assuming the 90 days horizon NovaGold Resources is expected to under-perform the Ritchie Bros. In addition to that, NovaGold Resources is 2.16 times more volatile than Ritchie Bros Auctioneers. It trades about -0.07 of its total potential returns per unit of risk. Ritchie Bros Auctioneers is currently generating about 0.15 per unit of volatility. If you would invest 11,369 in Ritchie Bros Auctioneers on September 23, 2024 and sell it today you would earn a total of 1,637 from holding Ritchie Bros Auctioneers or generate 14.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
NovaGold Resources vs. Ritchie Bros Auctioneers
Performance |
Timeline |
NovaGold Resources |
Ritchie Bros Auctioneers |
NovaGold Resources and Ritchie Bros Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NovaGold Resources and Ritchie Bros
The main advantage of trading using opposite NovaGold Resources and Ritchie Bros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NovaGold Resources position performs unexpectedly, Ritchie Bros 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 Ritchie Bros will offset losses from the drop in Ritchie Bros' long position.NovaGold Resources vs. Centerra Gold | NovaGold Resources vs. Alamos Gold | NovaGold Resources vs. MAG Silver Corp | NovaGold Resources vs. Seabridge Gold |
Ritchie Bros vs. Baylin Technologies | Ritchie Bros vs. Kits Eyecare | Ritchie Bros vs. Greenlane Renewables | Ritchie Bros vs. Supremex |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |