Correlation Between Energy Fuels and Western Copper
Can any of the company-specific risk be diversified away by investing in both Energy Fuels and Western Copper 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 Energy Fuels and Western Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Fuels and Western Copper and, you can compare the effects of market volatilities on Energy Fuels and Western Copper 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 Energy Fuels with a short position of Western Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Fuels and Western Copper.
Diversification Opportunities for Energy Fuels and Western Copper
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Energy and Western is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Energy Fuels and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper and Energy Fuels 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 Energy Fuels are associated (or correlated) with Western Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Copper has no effect on the direction of Energy Fuels i.e., Energy Fuels and Western Copper go up and down completely randomly.
Pair Corralation between Energy Fuels and Western Copper
Assuming the 90 days trading horizon Energy Fuels is expected to under-perform the Western Copper. In addition to that, Energy Fuels is 1.42 times more volatile than Western Copper and. It trades about -0.12 of its total potential returns per unit of risk. Western Copper and is currently generating about 0.06 per unit of volatility. If you would invest 153.00 in Western Copper and on December 29, 2024 and sell it today you would earn a total of 13.00 from holding Western Copper and or generate 8.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Energy Fuels vs. Western Copper and
Performance |
Timeline |
Energy Fuels |
Western Copper |
Energy Fuels and Western Copper Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Energy Fuels and Western Copper
The main advantage of trading using opposite Energy Fuels and Western Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Fuels position performs unexpectedly, Western Copper 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 Western Copper will offset losses from the drop in Western Copper's long position.Energy Fuels vs. Canlan Ice Sports | Energy Fuels vs. A W FOOD | Energy Fuels vs. Maple Leaf Foods | Energy Fuels vs. Constellation Software |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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