Correlation Between Verizon Communications and NEXEN
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By analyzing existing cross correlation between Verizon Communications and NEXEN INC 64, you can compare the effects of market volatilities on Verizon Communications and NEXEN 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 Verizon Communications with a short position of NEXEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Verizon Communications and NEXEN.
Diversification Opportunities for Verizon Communications and NEXEN
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Verizon and NEXEN is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Verizon Communications and NEXEN INC 64 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXEN INC 64 and Verizon Communications 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 Verizon Communications are associated (or correlated) with NEXEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXEN INC 64 has no effect on the direction of Verizon Communications i.e., Verizon Communications and NEXEN go up and down completely randomly.
Pair Corralation between Verizon Communications and NEXEN
Allowing for the 90-day total investment horizon Verizon Communications is expected to generate 116.38 times less return on investment than NEXEN. But when comparing it to its historical volatility, Verizon Communications is 68.74 times less risky than NEXEN. It trades about 0.05 of its potential returns per unit of risk. NEXEN INC 64 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 10,683 in NEXEN INC 64 on August 30, 2024 and sell it today you would earn a total of 927.00 from holding NEXEN INC 64 or generate 8.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 22.18% |
| Values | Daily Returns |
Verizon Communications vs. NEXEN INC 64
Performance |
| Timeline |
| Verizon Communications |
| NEXEN INC 64 |
Verizon Communications and NEXEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Verizon Communications and NEXEN
The main advantage of trading using opposite Verizon Communications and NEXEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verizon Communications position performs unexpectedly, NEXEN 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 NEXEN will offset losses from the drop in NEXEN's long position.| Verizon Communications vs. T Mobile | Verizon Communications vs. Comcast Corp | Verizon Communications vs. Charter Communications | Verizon Communications vs. Vodafone Group PLC |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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