Correlation Between Denison Mines and 65339KBY5

Can any of the company-specific risk be diversified away by investing in both Denison Mines and 65339KBY5 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 Denison Mines and 65339KBY5 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Denison Mines Corp and NEE 1875 15 JAN 27, you can compare the effects of market volatilities on Denison Mines and 65339KBY5 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 Denison Mines with a short position of 65339KBY5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Denison Mines and 65339KBY5.

Diversification Opportunities for Denison Mines and 65339KBY5

-0.38

Correlation Coefficient

Denison Mines  65339KBY5

Very good diversification

The 3 months correlation between Denison and 65339KBY5 is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Denison Mines Corp and NEE 1875 15 JAN 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEE 1875 15 and Denison Mines 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 Denison Mines Corp are associated (or correlated) with 65339KBY5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEE 1875 15 has no effect on the direction of Denison Mines i.e., Denison Mines and 65339KBY5 go up and down completely randomly.

Pair Corralation between Denison Mines and 65339KBY5

Considering the 90-day investment horizon Denison Mines Corp is expected to under-perform the 65339KBY5. In addition to that, Denison Mines is 4.33 times more volatile than NEE 1875 15 JAN 27. It trades about -0.07 of its total potential returns per unit of risk. NEE 1875 15 JAN 27 is currently generating about -0.05 per unit of volatility. If you would invest  9,434  in NEE 1875 15 JAN 27 on December 25, 2024 and sell it today you would lose (278.00) from holding NEE 1875 15 JAN 27 or give up 2.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.72%
Values	Daily Returns

Denison Mines Corp  vs.  NEE 1875 15 JAN 27

Denison Mines Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Denison Mines Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

NEE 1875 15

Risk-Adjusted Performance

Very Weak

Over the last 90 days NEE 1875 15 JAN 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 65339KBY5 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Denison Mines and 65339KBY5

The main advantage of trading using opposite Denison Mines and 65339KBY5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Denison Mines position performs unexpectedly, 65339KBY5 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 65339KBY5 will offset losses from the drop in 65339KBY5's long position.

The idea behind Denison Mines Corp and NEE 1875 15 JAN 27 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.