Correlation Between Uranium Royalty and GoldMining

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

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

Diversification Opportunities for Uranium Royalty and GoldMining

-0.45

Correlation Coefficient

Uranium Royalty  GoldMining

Very good diversification

The 3 months correlation between Uranium and GoldMining is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Uranium Royalty Corp and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining and Uranium Royalty 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 Uranium Royalty Corp are associated (or correlated) with GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMining has no effect on the direction of Uranium Royalty i.e., Uranium Royalty and GoldMining go up and down completely randomly.

Pair Corralation between Uranium Royalty and GoldMining

Given the investment horizon of 90 days Uranium Royalty Corp is expected to under-perform the GoldMining. In addition to that, Uranium Royalty is 1.79 times more volatile than GoldMining. It trades about -0.07 of its total potential returns per unit of risk. GoldMining is currently generating about 0.03 per unit of volatility. If you would invest  80.00  in GoldMining on December 30, 2024 and sell it today you would earn a total of  2.00  from holding GoldMining or generate 2.5% return on investment over 90 days.

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

Uranium Royalty Corp  vs.  GoldMining

Uranium Royalty Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Uranium Royalty Corp 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 Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

GoldMining

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GoldMining are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, GoldMining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Uranium Royalty and GoldMining

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

The idea behind Uranium Royalty Corp and GoldMining 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.