Correlation Between Transport International and UR ENERGY

Can any of the company-specific risk be diversified away by investing in both Transport International and UR 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 Transport International and UR ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Transport International Holdings and UR ENERGY, you can compare the effects of market volatilities on Transport International and UR 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 Transport International with a short position of UR ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transport International and UR ENERGY.

Diversification Opportunities for Transport International and UR ENERGY

-0.34

Correlation Coefficient

Transport International  UR ENERGY

Very good diversification

The 3 months correlation between Transport and U9T is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Transport International Holdin and UR ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UR ENERGY and Transport International 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 Transport International Holdings are associated (or correlated) with UR ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UR ENERGY has no effect on the direction of Transport International i.e., Transport International and UR ENERGY go up and down completely randomly.

Pair Corralation between Transport International and UR ENERGY

Assuming the 90 days horizon Transport International Holdings is expected to generate 1.55 times more return on investment than UR ENERGY. However, Transport International is 1.55 times more volatile than UR ENERGY. It trades about 0.06 of its potential returns per unit of risk. UR ENERGY is currently generating about 0.02 per unit of risk. If you would invest  30.00  in Transport International Holdings on October 11, 2024 and sell it today you would earn a total of  65.00  from holding Transport International Holdings or generate 216.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Transport International Holdin  vs.  UR ENERGY

Transport International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Transport International Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Transport International is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

UR ENERGY

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in UR ENERGY are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, UR ENERGY may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Transport International and UR ENERGY

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

The idea behind Transport International Holdings and UR 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.