Correlation Between Moodys and NexGen Energy

Can any of the company-specific risk be diversified away by investing in both Moodys 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 Moodys and NexGen Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Moodys and NexGen Energy, you can compare the effects of market volatilities on Moodys 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 Moodys with a short position of NexGen Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moodys and NexGen Energy.

Diversification Opportunities for Moodys and NexGen Energy

0.44

Correlation Coefficient

Moodys  NexGen Energy

Very weak diversification

The 3 months correlation between Moodys and NexGen is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Moodys and NexGen Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NexGen Energy and Moodys 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 Moodys 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 Moodys i.e., Moodys and NexGen Energy go up and down completely randomly.

Pair Corralation between Moodys and NexGen Energy

Assuming the 90 days horizon Moodys is expected to generate 2.59 times less return on investment than NexGen Energy. But when comparing it to its historical volatility, Moodys is 2.57 times less risky than NexGen Energy. It trades about 0.17 of its potential returns per unit of risk. NexGen Energy is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  384.00  in NexGen Energy on April 22, 2025 and sell it today you would earn a total of  201.00  from holding NexGen Energy or generate 52.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Moodys  vs.  NexGen Energy

Moodys

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Moodys are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Moodys reported solid returns over the last few months and may actually be approaching a breakup point.

NexGen Energy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NexGen Energy are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, NexGen Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Moodys and NexGen Energy

The main advantage of trading using opposite Moodys and NexGen Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moodys 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.

The idea behind Moodys and NexGen Energy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.