Correlation Between Cameco Corp and Vestiage

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

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

Diversification Opportunities for Cameco Corp and Vestiage

0.18

Correlation Coefficient

Cameco Corp  Vestiage

Average diversification

The 3 months correlation between Cameco and Vestiage is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Cameco Corp and Vestiage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestiage and Cameco Corp 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 Cameco Corp are associated (or correlated) with Vestiage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestiage has no effect on the direction of Cameco Corp i.e., Cameco Corp and Vestiage go up and down completely randomly.

Pair Corralation between Cameco Corp and Vestiage

Considering the 90-day investment horizon Cameco Corp is expected to under-perform the Vestiage. But the stock apears to be less risky and, when comparing its historical volatility, Cameco Corp is 48.92 times less risky than Vestiage. The stock trades about -0.05 of its potential returns per unit of risk. The Vestiage is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  4.00  in Vestiage on October 22, 2024 and sell it today you would earn a total of  6.00  from holding Vestiage or generate 150.0% return on investment over 90 days.

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

Cameco Corp  vs.  Vestiage

Cameco Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cameco Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's fundamental indicators remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the company stakeholders.

Vestiage

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vestiage are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Vestiage unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cameco Corp and Vestiage

The main advantage of trading using opposite Cameco Corp and Vestiage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cameco Corp position performs unexpectedly, Vestiage 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 Vestiage will offset losses from the drop in Vestiage's long position.

The idea behind Cameco Corp and Vestiage 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.