Correlation Between JSC National and NexGen Energy
Can any of the company-specific risk be diversified away by investing in both JSC National 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 JSC National and NexGen Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JSC National Atomic and NexGen Energy, you can compare the effects of market volatilities on JSC National 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 JSC National with a short position of NexGen Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of JSC National and NexGen Energy.
Diversification Opportunities for JSC National and NexGen Energy
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JSC and NexGen is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding JSC National Atomic and NexGen Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NexGen Energy and JSC National 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 JSC National Atomic 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 JSC National i.e., JSC National and NexGen Energy go up and down completely randomly.
Pair Corralation between JSC National and NexGen Energy
Assuming the 90 days horizon JSC National is expected to generate 5.97 times less return on investment than NexGen Energy. But when comparing it to its historical volatility, JSC National Atomic is 1.64 times less risky than NexGen Energy. It trades about 0.05 of its potential returns per unit of risk. NexGen Energy is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 526.00 in NexGen Energy on September 12, 2024 and sell it today you would earn a total of 259.00 from holding NexGen Energy or generate 49.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JSC National Atomic vs. NexGen Energy
Performance |
| Timeline |
| JSC National Atomic |
| NexGen Energy |
JSC National and NexGen Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JSC National and NexGen Energy
The main advantage of trading using opposite JSC National and NexGen Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JSC National 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.| JSC National vs. JSC National Atomic | JSC National vs. Global Atomic Corp | JSC National vs. Sprott Physical Uranium |
| NexGen Energy vs. CyberArk Software | NexGen Energy vs. Magic Software Enterprises | NexGen Energy vs. Quaker Chemical | NexGen Energy vs. Siamgas And Petrochemicals |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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