Correlation Between GOME Retail and NexGen Energy
Can any of the company-specific risk be diversified away by investing in both GOME Retail and NexGen Energy 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 GOME Retail and NexGen Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GOME Retail Holdings and NexGen Energy, you can compare the effects of market volatilities on GOME Retail and NexGen Energy 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 GOME Retail with a short position of NexGen Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOME Retail and NexGen Energy.
Diversification Opportunities for GOME Retail and NexGen Energy
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GOME and NexGen is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding GOME Retail Holdings and NexGen Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NexGen Energy and GOME Retail 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 GOME Retail Holdings are associated (or correlated) with NexGen Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NexGen Energy has no effect on the direction of GOME Retail i.e., GOME Retail and NexGen Energy go up and down completely randomly.
Pair Corralation between GOME Retail and NexGen Energy
Assuming the 90 days trading horizon GOME Retail Holdings is expected to generate 3.51 times more return on investment than NexGen Energy. However, GOME Retail is 3.51 times more volatile than NexGen Energy. It trades about 0.02 of its potential returns per unit of risk. NexGen Energy is currently generating about 0.04 per unit of risk. If you would invest 1.00 in GOME Retail Holdings on September 24, 2024 and sell it today you would lose (0.90) from holding GOME Retail Holdings or give up 90.0% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
GOME Retail Holdings vs. NexGen Energy
Performance |
Timeline |
GOME Retail Holdings |
NexGen Energy |
GOME Retail and NexGen Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GOME Retail and NexGen Energy
The main advantage of trading using opposite GOME Retail and NexGen Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOME Retail position performs unexpectedly, NexGen Energy 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 NexGen Energy will offset losses from the drop in NexGen Energy's long position.GOME Retail vs. ACCSYS TECHPLC EO | GOME Retail vs. JAPAN TOBACCO UNSPADR12 | GOME Retail vs. MUTUIONLINE | GOME Retail vs. RCM TECHNOLOGIES |
NexGen Energy vs. SWISS WATER DECAFFCOFFEE | NexGen Energy vs. Harmony Gold Mining | NexGen Energy vs. COLUMBIA SPORTSWEAR | NexGen Energy vs. GREENX METALS LTD |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |