Correlation Between Anfield Resources and NexGen Energy
Can any of the company-specific risk be diversified away by investing in both Anfield Resources and NexGen Energy 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 Anfield Resources and NexGen Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anfield Resources and NexGen Energy, you can compare the effects of market volatilities on Anfield Resources and NexGen Energy 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 Anfield Resources with a short position of NexGen Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anfield Resources and NexGen Energy.
Diversification Opportunities for Anfield Resources and NexGen Energy
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Anfield and NexGen is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Anfield Resources and NexGen Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NexGen Energy and Anfield 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 Anfield Resources are associated (or correlated) with NexGen Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NexGen Energy has no effect on the direction of Anfield Resources i.e., Anfield Resources and NexGen Energy go up and down completely randomly.
Pair Corralation between Anfield Resources and NexGen Energy
Assuming the 90 days trading horizon Anfield Resources is expected to generate 3.7 times more return on investment than NexGen Energy. However, Anfield Resources is 3.7 times more volatile than NexGen Energy. It trades about 0.07 of its potential returns per unit of risk. NexGen Energy is currently generating about 0.06 per unit of risk. If you would invest 4.77 in Anfield Resources on September 4, 2024 and sell it today you would earn a total of 1.78 from holding Anfield Resources or generate 37.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anfield Resources vs. NexGen Energy
Performance |
| Timeline |
| Anfield Resources |
| NexGen Energy |
Anfield Resources and NexGen Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anfield Resources and NexGen Energy
The main advantage of trading using opposite Anfield Resources and NexGen Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anfield Resources position performs unexpectedly, NexGen Energy 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 NexGen Energy will offset losses from the drop in NexGen Energy's long position.| Anfield Resources vs. JSC National Atomic | Anfield Resources vs. Global Atomic Corp | Anfield Resources vs. Sprott Physical Uranium | Anfield Resources vs. Superior Plus Corp |
| NexGen Energy vs. Texas Roadhouse | NexGen Energy vs. Fukuyama Transporting Co | NexGen Energy vs. Gaztransport Technigaz SA | NexGen Energy vs. Lion One Metals |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |