Correlation Between NexGen Energy and Postmedia Network
Can any of the company-specific risk be diversified away by investing in both NexGen Energy and Postmedia Network 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 Postmedia Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NexGen Energy and Postmedia Network Canada, you can compare the effects of market volatilities on NexGen Energy and Postmedia Network 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 Postmedia Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of NexGen Energy and Postmedia Network.
Diversification Opportunities for NexGen Energy and Postmedia Network
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NexGen and Postmedia is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding NexGen Energy and Postmedia Network Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postmedia Network Canada 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 Postmedia Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postmedia Network Canada has no effect on the direction of NexGen Energy i.e., NexGen Energy and Postmedia Network go up and down completely randomly.
Pair Corralation between NexGen Energy and Postmedia Network
Assuming the 90 days trading horizon NexGen Energy is expected to generate 1.22 times more return on investment than Postmedia Network. However, NexGen Energy is 1.22 times more volatile than Postmedia Network Canada. It trades about 0.23 of its potential returns per unit of risk. Postmedia Network Canada is currently generating about -0.09 per unit of risk. If you would invest 996.00 in NexGen Energy on September 4, 2024 and sell it today you would earn a total of 159.00 from holding NexGen Energy or generate 15.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
NexGen Energy vs. Postmedia Network Canada
Performance |
| Timeline |
| NexGen Energy |
| Postmedia Network Canada |
NexGen Energy and Postmedia Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NexGen Energy and Postmedia Network
The main advantage of trading using opposite NexGen Energy and Postmedia Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NexGen Energy position performs unexpectedly, Postmedia Network 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 Postmedia Network will offset losses from the drop in Postmedia Network's long position.| NexGen Energy vs. ALX Uranium Corp | NexGen Energy vs. Forum Energy Metals | NexGen Energy vs. K2 Gold | NexGen Energy vs. Blue Sky Uranium |
| Postmedia Network vs. Sangoma Technologies Corp | Postmedia Network vs. Oculus VisionTech | Postmedia Network vs. Lion One Metals | Postmedia Network vs. Quorum Information Technologies |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |