The correlations matrix shows how correlated a specific stock is to another stock (or asset).
(min = -1, max = 1, 0 = no relationship).
High positive value = The two assets usually move the same way on any given day (Low diversification).
High negative value = The two assets usually move the opposite way (High diversification).
Low value = The two assets do not have a clear relationship.
Correlations matrix for the time period April 19 – June 18:
Novo Resources (NVO) and Pacton Gold (PAC) have a rather high postive correlation number (0.69). Thus these two stocks usually move in tandem and owning them both does not give much diversification in terms of smoothing out the portfolio volatility.