Correlation Between Elevate Uranium and Peninsula Energy

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

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

Diversification Opportunities for Elevate Uranium and Peninsula Energy

-0.26

Correlation Coefficient

Elevate Uranium  Peninsula Energy

Very good diversification

The 3 months correlation between Elevate and Peninsula is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Elevate Uranium and Peninsula Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peninsula Energy and Elevate Uranium 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 Elevate Uranium are associated (or correlated) with Peninsula Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peninsula Energy has no effect on the direction of Elevate Uranium i.e., Elevate Uranium and Peninsula Energy go up and down completely randomly.

Pair Corralation between Elevate Uranium and Peninsula Energy

Assuming the 90 days horizon Elevate Uranium is expected to generate 101.17 times less return on investment than Peninsula Energy. But when comparing it to its historical volatility, Elevate Uranium is 15.33 times less risky than Peninsula Energy. It trades about 0.02 of its potential returns per unit of risk. Peninsula Energy is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  5.20  in Peninsula Energy on September 4, 2024 and sell it today you would earn a total of  73.80  from holding Peninsula Energy or generate 1419.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.65%
Values	Daily Returns

Elevate Uranium  vs.  Peninsula Energy

Elevate Uranium

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Elevate Uranium are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Elevate Uranium may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Peninsula Energy

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Peninsula Energy are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Peninsula Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Elevate Uranium and Peninsula Energy

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

The idea behind Elevate Uranium and Peninsula 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.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.