Correlation Between Centrus Energy and Uranium Energy

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

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

Diversification Opportunities for Centrus Energy and Uranium Energy

0.11

Correlation Coefficient

Centrus Energy  Uranium Energy

Average diversification

The 3 months correlation between Centrus and Uranium is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Centrus Energy and Uranium Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uranium Energy Corp and Centrus 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 Centrus Energy are associated (or correlated) with Uranium Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uranium Energy Corp has no effect on the direction of Centrus Energy i.e., Centrus Energy and Uranium Energy go up and down completely randomly.

Pair Corralation between Centrus Energy and Uranium Energy

Considering the 90-day investment horizon Centrus Energy is expected to generate 1.55 times more return on investment than Uranium Energy. However, Centrus Energy is 1.55 times more volatile than Uranium Energy Corp. It trades about 0.04 of its potential returns per unit of risk. Uranium Energy Corp is currently generating about -0.1 per unit of risk. If you would invest  7,263  in Centrus Energy on December 25, 2024 and sell it today you would earn a total of  187.00  from holding Centrus Energy or generate 2.57% return on investment over 90 days.

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

Centrus Energy  vs.  Uranium Energy Corp

Centrus Energy

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Centrus Energy are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Centrus Energy unveiled solid returns over the last few months and may actually be approaching a breakup point.

Uranium Energy Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Uranium Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Centrus Energy and Uranium Energy

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

The idea behind Centrus Energy and Uranium 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .