Correlation Between NexGen Energy and Bannerman Resources
Can any of the company-specific risk be diversified away by investing in both NexGen Energy and Bannerman Resources 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 NexGen Energy and Bannerman Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NexGen Energy and Bannerman Resources Limited, you can compare the effects of market volatilities on NexGen Energy and Bannerman Resources 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 NexGen Energy with a short position of Bannerman Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of NexGen Energy and Bannerman Resources.
Diversification Opportunities for NexGen Energy and Bannerman Resources
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NexGen and Bannerman is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding NexGen Energy and Bannerman Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bannerman Resources and NexGen Energy 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 NexGen Energy are associated (or correlated) with Bannerman Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bannerman Resources has no effect on the direction of NexGen Energy i.e., NexGen Energy and Bannerman Resources go up and down completely randomly.
Pair Corralation between NexGen Energy and Bannerman Resources
Assuming the 90 days horizon NexGen Energy is expected to under-perform the Bannerman Resources. But the stock apears to be less risky and, when comparing its historical volatility, NexGen Energy is 1.2 times less risky than Bannerman Resources. The stock trades about 0.0 of its potential returns per unit of risk. The Bannerman Resources Limited is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 183.00 in Bannerman Resources Limited on December 4, 2024 and sell it today you would lose (46.00) from holding Bannerman Resources Limited or give up 25.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NexGen Energy vs. Bannerman Resources Limited
Performance |
| Timeline |
| NexGen Energy |
| Bannerman Resources |
NexGen Energy and Bannerman Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NexGen Energy and Bannerman Resources
The main advantage of trading using opposite NexGen Energy and Bannerman Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NexGen Energy position performs unexpectedly, Bannerman Resources 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 Bannerman Resources will offset losses from the drop in Bannerman Resources' long position.| NexGen Energy vs. MAVEN WIRELESS SWEDEN | NexGen Energy vs. Alliance Data Systems | NexGen Energy vs. Tower One Wireless | NexGen Energy vs. OFFICE DEPOT |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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