Correlation Between Peninsula Energy and GoviEx Uranium

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

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

Diversification Opportunities for Peninsula Energy and GoviEx Uranium

-0.82

Correlation Coefficient

Peninsula Energy  GoviEx Uranium

Pay attention - limited upside

The 3 months correlation between Peninsula and GoviEx is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Peninsula Energy and GoviEx Uranium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoviEx Uranium and Peninsula 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 Peninsula Energy are associated (or correlated) with GoviEx Uranium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoviEx Uranium has no effect on the direction of Peninsula Energy i.e., Peninsula Energy and GoviEx Uranium go up and down completely randomly.

Pair Corralation between Peninsula Energy and GoviEx Uranium

Assuming the 90 days horizon Peninsula Energy is expected to generate 8.07 times more return on investment than GoviEx Uranium. However, Peninsula Energy is 8.07 times more volatile than GoviEx Uranium. It trades about 0.09 of its potential returns per unit of risk. GoviEx Uranium is currently generating about 0.05 per unit of risk. If you would invest  7.20  in Peninsula Energy on October 10, 2024 and sell it today you would earn a total of  80.80  from holding Peninsula Energy or generate 1122.22% return on investment over 90 days.

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

Peninsula Energy  vs.  GoviEx Uranium

Peninsula Energy

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Peninsula Energy are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Peninsula Energy reported solid returns over the last few months and may actually be approaching a breakup point.

GoviEx Uranium

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Peninsula Energy and GoviEx Uranium

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

The idea behind Peninsula Energy and GoviEx Uranium 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.