Correlation Between Gaztransport Technigaz and NexGen Energy
Can any of the company-specific risk be diversified away by investing in both Gaztransport Technigaz 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 Gaztransport Technigaz and NexGen Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaztransport Technigaz SA and NexGen Energy, you can compare the effects of market volatilities on Gaztransport Technigaz 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 Gaztransport Technigaz with a short position of NexGen Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and NexGen Energy.
Diversification Opportunities for Gaztransport Technigaz and NexGen Energy
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gaztransport and NexGen is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SA and NexGen Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NexGen Energy and Gaztransport Technigaz 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 Gaztransport Technigaz SA 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 Gaztransport Technigaz i.e., Gaztransport Technigaz and NexGen Energy go up and down completely randomly.
Pair Corralation between Gaztransport Technigaz and NexGen Energy
Assuming the 90 days horizon Gaztransport Technigaz is expected to generate 2.83 times less return on investment than NexGen Energy. But when comparing it to its historical volatility, Gaztransport Technigaz SA is 2.06 times less risky than NexGen Energy. It trades about 0.04 of its potential returns per unit of risk. NexGen Energy is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 381.00 in NexGen Energy on September 5, 2024 and sell it today you would earn a total of 391.00 from holding NexGen Energy or generate 102.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaztransport Technigaz SA vs. NexGen Energy
Performance |
| Timeline |
| Gaztransport Technigaz |
| NexGen Energy |
Gaztransport Technigaz and NexGen Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport Technigaz and NexGen Energy
The main advantage of trading using opposite Gaztransport Technigaz and NexGen Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport Technigaz 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.| Gaztransport Technigaz vs. Superior Plus Corp | Gaztransport Technigaz vs. NMI Holdings | Gaztransport Technigaz vs. Origin Agritech | Gaztransport Technigaz vs. SIVERS SEMICONDUCTORS AB |
| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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