Correlation Between Centrus Energy and Ur Energy

Can any of the company-specific risk be diversified away by investing in both Centrus Energy 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 Centrus Energy and Ur 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 Ur Energy, you can compare the effects of market volatilities on Centrus Energy 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 Centrus Energy with a short position of Ur Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrus Energy and Ur Energy.

Diversification Opportunities for Centrus Energy and Ur Energy

-0.07

Correlation Coefficient

Centrus Energy  Ur Energy

Good diversification

The 3 months correlation between Centrus and URG is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Centrus Energy and Ur Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ur Energy 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 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 Centrus Energy i.e., Centrus Energy and Ur Energy go up and down completely randomly.

Pair Corralation between Centrus Energy and Ur Energy

Considering the 90-day investment horizon Centrus Energy is expected to generate 1.36 times more return on investment than Ur Energy. However, Centrus Energy is 1.36 times more volatile than Ur Energy. It trades about 0.03 of its potential returns per unit of risk. Ur Energy is currently generating about -0.12 per unit of risk. If you would invest  7,071  in Centrus Energy on December 27, 2024 and sell it today you would lose (72.00) from holding Centrus Energy or give up 1.02% of portfolio value over 90 days.

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

Centrus Energy  vs.  Ur Energy

Centrus Energy

Risk-Adjusted Performance

Weak

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 may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Ur Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ur Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Centrus Energy and Ur Energy

The main advantage of trading using opposite Centrus Energy and Ur Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrus Energy 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 Centrus Energy 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.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..