Correlation Between Ur Energy and Aston Bay

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

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

Diversification Opportunities for Ur Energy and Aston Bay

0.62

Correlation Coefficient

Ur Energy  Aston Bay

Poor diversification

The 3 months correlation between URE and Aston is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ur Energy and Aston Bay Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aston Bay Holdings and Ur 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 Ur Energy are associated (or correlated) with Aston Bay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aston Bay Holdings has no effect on the direction of Ur Energy i.e., Ur Energy and Aston Bay go up and down completely randomly.

Pair Corralation between Ur Energy and Aston Bay

Assuming the 90 days trading horizon Ur Energy is expected to under-perform the Aston Bay. But the stock apears to be less risky and, when comparing its historical volatility, Ur Energy is 1.49 times less risky than Aston Bay. The stock trades about -0.19 of its potential returns per unit of risk. The Aston Bay Holdings is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest  6.00  in Aston Bay Holdings on December 4, 2024 and sell it today you would lose (1.00) from holding Aston Bay Holdings or give up 16.67% of portfolio value over 90 days.

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

Ur Energy  vs.  Aston Bay Holdings

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. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Aston Bay Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aston Bay Holdings 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 Ur Energy and Aston Bay

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

The idea behind Ur Energy and Aston Bay Holdings 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.