Correlation Between Sprott Uranium and FLFR

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

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

Diversification Opportunities for Sprott Uranium and FLFR

0.0

Correlation Coefficient

Sprott Uranium  FLFR

Pay attention - limited upside

The 3 months correlation between Sprott and FLFR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Uranium Miners and FLFR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLFR and Sprott Uranium 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 Sprott Uranium Miners are associated (or correlated) with FLFR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLFR has no effect on the direction of Sprott Uranium i.e., Sprott Uranium and FLFR go up and down completely randomly.

Pair Corralation between Sprott Uranium and FLFR

If you would invest (100.00) in FLFR on December 27, 2024 and sell it today you would earn a total of  100.00  from holding FLFR or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sprott Uranium Miners  vs.  FLFR

Sprott Uranium Miners

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sprott Uranium Miners has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's basic 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 ETF investors.

FLFR

Risk-Adjusted Performance

Very Weak

Over the last 90 days FLFR has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, FLFR is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Sprott Uranium and FLFR

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

The idea behind Sprott Uranium Miners and FLFR 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.