Correlation Between EnCore Energy and Sunoco LP

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

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

Diversification Opportunities for EnCore Energy and Sunoco LP

-0.36

Correlation Coefficient

EnCore Energy  Sunoco LP

Very good diversification

The 3 months correlation between EnCore and Sunoco is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding enCore Energy Corp and Sunoco LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunoco LP and EnCore Energy 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 enCore Energy Corp are associated (or correlated) with Sunoco LP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunoco LP has no effect on the direction of EnCore Energy i.e., EnCore Energy and Sunoco LP go up and down completely randomly.

Pair Corralation between EnCore Energy and Sunoco LP

Allowing for the 90-day total investment horizon enCore Energy Corp is expected to under-perform the Sunoco LP. In addition to that, EnCore Energy is 1.43 times more volatile than Sunoco LP. It trades about -0.46 of its total potential returns per unit of risk. Sunoco LP is currently generating about -0.11 per unit of volatility. If you would invest  5,382  in Sunoco LP on September 20, 2024 and sell it today you would lose (185.00) from holding Sunoco LP or give up 3.44% of portfolio value over 90 days.

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

enCore Energy Corp  vs.  Sunoco LP

enCore Energy Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days enCore Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Sunoco LP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sunoco LP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Sunoco LP is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with EnCore Energy and Sunoco LP

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

The idea behind enCore Energy Corp and Sunoco LP 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.