Correlation Between NexGen Energy and CI Lawrence
Can any of the company-specific risk be diversified away by investing in both NexGen Energy and CI Lawrence 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 Lawrence 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 Lawrence Park, you can compare the effects of market volatilities on NexGen Energy and CI Lawrence 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 Lawrence. Check out your portfolio center. Please also check ongoing floating volatility patterns of NexGen Energy and CI Lawrence.
Diversification Opportunities for NexGen Energy and CI Lawrence
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NexGen and CRED is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding NexGen Energy and CI Lawrence Park in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Lawrence Park 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 Lawrence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Lawrence Park has no effect on the direction of NexGen Energy i.e., NexGen Energy and CI Lawrence go up and down completely randomly.
Pair Corralation between NexGen Energy and CI Lawrence
Assuming the 90 days trading horizon NexGen Energy is expected to generate 21.21 times more return on investment than CI Lawrence. However, NexGen Energy is 21.21 times more volatile than CI Lawrence Park. It trades about 0.04 of its potential returns per unit of risk. CI Lawrence Park is currently generating about 0.24 per unit of risk. If you would invest 1,062 in NexGen Energy on August 29, 2024 and sell it today you would earn a total of 108.00 from holding NexGen Energy or generate 10.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NexGen Energy vs. CI Lawrence Park
Performance |
| Timeline |
| NexGen Energy |
| CI Lawrence Park |
NexGen Energy and CI Lawrence Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NexGen Energy and CI Lawrence
The main advantage of trading using opposite NexGen Energy and CI Lawrence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NexGen Energy position performs unexpectedly, CI Lawrence 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 Lawrence will offset losses from the drop in CI Lawrence's long position.| NexGen Energy vs. Baselode Energy Corp | NexGen Energy vs. Standard Uranium | NexGen Energy vs. Skyharbour Resources | NexGen Energy vs. iShares Canadian HYBrid |
| CI Lawrence vs. Global Atomic Corp | CI Lawrence vs. enCore Energy Corp | CI Lawrence vs. Fission Uranium Corp | CI Lawrence vs. NexGen Energy |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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