Correlation Between NexGen Energy and Fidelity Global
Can any of the company-specific risk be diversified away by investing in both NexGen Energy and Fidelity Global 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 Fidelity Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NexGen Energy and Fidelity Global Monthly, you can compare the effects of market volatilities on NexGen Energy and Fidelity Global 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 Fidelity Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of NexGen Energy and Fidelity Global.
Diversification Opportunities for NexGen Energy and Fidelity Global
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NexGen and Fidelity is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding NexGen Energy and Fidelity Global Monthly in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Global Monthly 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 Fidelity Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Global Monthly has no effect on the direction of NexGen Energy i.e., NexGen Energy and Fidelity Global go up and down completely randomly.
Pair Corralation between NexGen Energy and Fidelity Global
Assuming the 90 days trading horizon NexGen Energy is expected to generate 7.9 times more return on investment than Fidelity Global. However, NexGen Energy is 7.9 times more volatile than Fidelity Global Monthly. It trades about 0.23 of its potential returns per unit of risk. Fidelity Global Monthly is currently generating about -0.01 per unit of risk. If you would invest 882.00 in NexGen Energy on August 30, 2024 and sell it today you would earn a total of 283.00 from holding NexGen Energy or generate 32.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.67% |
| Values | Daily Returns |
NexGen Energy vs. Fidelity Global Monthly
Performance |
| Timeline |
| NexGen Energy |
| Fidelity Global Monthly |
NexGen Energy and Fidelity Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NexGen Energy and Fidelity Global
The main advantage of trading using opposite NexGen Energy and Fidelity Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NexGen Energy position performs unexpectedly, Fidelity Global 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 Fidelity Global will offset losses from the drop in Fidelity Global'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 |
| Fidelity Global vs. Fidelity Canadian Monthly | Fidelity Global vs. Fidelity Dividend for | Fidelity Global vs. Fidelity High Dividend | Fidelity Global vs. Fidelity International High |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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