Correlation Between NexGen Energy and Mackenzie Emerging
Can any of the company-specific risk be diversified away by investing in both NexGen Energy and Mackenzie Emerging 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 Mackenzie Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NexGen Energy and Mackenzie Emerging Markets, you can compare the effects of market volatilities on NexGen Energy and Mackenzie Emerging 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 Mackenzie Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of NexGen Energy and Mackenzie Emerging.
Diversification Opportunities for NexGen Energy and Mackenzie Emerging
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between NexGen and Mackenzie is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding NexGen Energy and Mackenzie Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Emerging 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 Mackenzie Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Emerging has no effect on the direction of NexGen Energy i.e., NexGen Energy and Mackenzie Emerging go up and down completely randomly.
Pair Corralation between NexGen Energy and Mackenzie Emerging
Assuming the 90 days trading horizon NexGen Energy is expected to generate 5.28 times more return on investment than Mackenzie Emerging. However, NexGen Energy is 5.28 times more volatile than Mackenzie Emerging Markets. It trades about 0.16 of its potential returns per unit of risk. Mackenzie Emerging Markets is currently generating about -0.06 per unit of risk. If you would invest 1,058 in NexGen Energy on August 29, 2024 and sell it today you would earn a total of 112.00 from holding NexGen Energy or generate 10.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NexGen Energy vs. Mackenzie Emerging Markets
Performance |
| Timeline |
| NexGen Energy |
| Mackenzie Emerging |
NexGen Energy and Mackenzie Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NexGen Energy and Mackenzie Emerging
The main advantage of trading using opposite NexGen Energy and Mackenzie Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NexGen Energy position performs unexpectedly, Mackenzie Emerging 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 Mackenzie Emerging will offset losses from the drop in Mackenzie Emerging'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 |
| Mackenzie Emerging vs. Global Atomic Corp | Mackenzie Emerging vs. enCore Energy Corp | Mackenzie Emerging vs. Fission Uranium Corp | Mackenzie Emerging 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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