Correlation Between NexGen Energy and IShares Core
Can any of the company-specific risk be diversified away by investing in both NexGen Energy and IShares Core 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 IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NexGen Energy and iShares Core Conservative, you can compare the effects of market volatilities on NexGen Energy and IShares Core 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 IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of NexGen Energy and IShares Core.
Diversification Opportunities for NexGen Energy and IShares Core
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NexGen and IShares is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding NexGen Energy and iShares Core Conservative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core Conservative 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 IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core Conservative has no effect on the direction of NexGen Energy i.e., NexGen Energy and IShares Core go up and down completely randomly.
Pair Corralation between NexGen Energy and IShares Core
Assuming the 90 days trading horizon NexGen Energy is expected to generate 10.89 times more return on investment than IShares Core. However, NexGen Energy is 10.89 times more volatile than iShares Core Conservative. It trades about 0.16 of its potential returns per unit of risk. iShares Core Conservative is currently generating about 0.23 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NexGen Energy vs. iShares Core Conservative
Performance |
| Timeline |
| NexGen Energy |
| iShares Core Conservative |
NexGen Energy and IShares Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NexGen Energy and IShares Core
The main advantage of trading using opposite NexGen Energy and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NexGen Energy position performs unexpectedly, IShares Core 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 IShares Core will offset losses from the drop in IShares Core'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 |
| IShares Core vs. iShares Core Income | IShares Core vs. iShares Core Balanced | IShares Core vs. Vanguard Conservative ETF | IShares Core vs. BMO Conservative ETF |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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