Correlation Between Fortune Bay and EnCore Energy

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

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

Diversification Opportunities for Fortune Bay and EnCore Energy

-0.76

Correlation Coefficient

Fortune Bay  EnCore Energy

Pay attention - limited upside

The 3 months correlation between Fortune and EnCore is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Fortune Bay Corp and enCore Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on enCore Energy Corp and Fortune Bay 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 Fortune Bay Corp are associated (or correlated) with EnCore Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of enCore Energy Corp has no effect on the direction of Fortune Bay i.e., Fortune Bay and EnCore Energy go up and down completely randomly.

Pair Corralation between Fortune Bay and EnCore Energy

Assuming the 90 days horizon Fortune Bay Corp is expected to generate 0.69 times more return on investment than EnCore Energy. However, Fortune Bay Corp is 1.45 times less risky than EnCore Energy. It trades about 0.21 of its potential returns per unit of risk. enCore Energy Corp is currently generating about -0.14 per unit of risk. If you would invest  22.00  in Fortune Bay Corp on December 28, 2024 and sell it today you would earn a total of  19.00  from holding Fortune Bay Corp or generate 86.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Fortune Bay Corp  vs.  enCore Energy Corp

Fortune Bay Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fortune Bay Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Fortune Bay showed solid returns over the last few months and may actually be approaching a breakup point.

enCore Energy Corp

Risk-Adjusted Performance

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 Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Fortune Bay and EnCore Energy

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

The idea behind Fortune Bay Corp and enCore Energy Corp 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.