Correlation Between NexGen Energy and JSC National
Can any of the company-specific risk be diversified away by investing in both NexGen Energy and JSC National 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 JSC National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NexGen Energy and JSC National Atomic, you can compare the effects of market volatilities on NexGen Energy and JSC National 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 JSC National. Check out your portfolio center. Please also check ongoing floating volatility patterns of NexGen Energy and JSC National.
Diversification Opportunities for NexGen Energy and JSC National
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NexGen and JSC is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding NexGen Energy and JSC National Atomic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JSC National Atomic 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 JSC National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JSC National Atomic has no effect on the direction of NexGen Energy i.e., NexGen Energy and JSC National go up and down completely randomly.
Pair Corralation between NexGen Energy and JSC National
Considering the 90-day investment horizon NexGen Energy is expected to generate 5.88 times more return on investment than JSC National. However, NexGen Energy is 5.88 times more volatile than JSC National Atomic. It trades about 0.21 of its potential returns per unit of risk. JSC National Atomic is currently generating about 0.23 per unit of risk. If you would invest 736.00 in NexGen Energy on September 1, 2024 and sell it today you would earn a total of 108.00 from holding NexGen Energy or generate 14.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
NexGen Energy vs. JSC National Atomic
Performance |
| Timeline |
| NexGen Energy |
| JSC National Atomic |
NexGen Energy and JSC National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NexGen Energy and JSC National
The main advantage of trading using opposite NexGen Energy and JSC National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NexGen Energy position performs unexpectedly, JSC National 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 JSC National will offset losses from the drop in JSC National's long position.| NexGen Energy vs. Energy Fuels | NexGen Energy vs. Uranium Energy Corp | NexGen Energy vs. Cameco Corp | NexGen Energy vs. Ur Energy |
| JSC National vs. Isoenergy | JSC National vs. Paladin Energy | JSC National vs. F3 Uranium Corp | JSC National vs. enCore Energy Corp |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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