Correlation Between NexGen Energy and CI Marret
Can any of the company-specific risk be diversified away by investing in both NexGen Energy and CI Marret 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 CI Marret into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NexGen Energy and CI Marret Alternative, you can compare the effects of market volatilities on NexGen Energy and CI Marret 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 CI Marret. Check out your portfolio center. Please also check ongoing floating volatility patterns of NexGen Energy and CI Marret.
Diversification Opportunities for NexGen Energy and CI Marret
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NexGen and CMAR is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding NexGen Energy and CI Marret Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Marret Alternative 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 CI Marret. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Marret Alternative has no effect on the direction of NexGen Energy i.e., NexGen Energy and CI Marret go up and down completely randomly.
Pair Corralation between NexGen Energy and CI Marret
Assuming the 90 days trading horizon NexGen Energy is expected to generate 13.86 times more return on investment than CI Marret. However, NexGen Energy is 13.86 times more volatile than CI Marret Alternative. It trades about 0.29 of its potential returns per unit of risk. CI Marret Alternative is currently generating about -0.14 per unit of risk. If you would invest 1,048 in NexGen Energy on August 25, 2024 and sell it today you would earn a total of 194.00 from holding NexGen Energy or generate 18.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NexGen Energy vs. CI Marret Alternative
Performance |
| Timeline |
| NexGen Energy |
| CI Marret Alternative |
NexGen Energy and CI Marret Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NexGen Energy and CI Marret
The main advantage of trading using opposite NexGen Energy and CI Marret positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NexGen Energy position performs unexpectedly, CI Marret 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 CI Marret will offset losses from the drop in CI Marret's long position.| NexGen Energy vs. Fission Uranium Corp | NexGen Energy vs. Denison Mines Corp | NexGen Energy vs. Energy Fuels | NexGen Energy vs. enCore Energy Corp |
| CI Marret vs. CI Munro Alternative | CI Marret vs. CI Lawrence Park | CI Marret vs. CI Enhanced Short | CI Marret vs. CI Enhanced Government |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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