Correlation Between URU Metals and National Atomic

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

By analyzing existing cross correlation between URU Metals and National Atomic Co, you can compare the effects of market volatilities on URU Metals and National Atomic 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 URU Metals with a short position of National Atomic. Check out your portfolio center. Please also check ongoing floating volatility patterns of URU Metals and National Atomic.

Diversification Opportunities for URU Metals and National Atomic

0.25

Correlation Coefficient

URU Metals  National Atomic

Modest diversification

The 3 months correlation between URU and National is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding URU Metals and National Atomic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Atomic and URU Metals 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 URU Metals are associated (or correlated) with National Atomic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Atomic has no effect on the direction of URU Metals i.e., URU Metals and National Atomic go up and down completely randomly.

Pair Corralation between URU Metals and National Atomic

Assuming the 90 days trading horizon URU Metals is expected to under-perform the National Atomic. In addition to that, URU Metals is 2.26 times more volatile than National Atomic Co. It trades about -0.12 of its total potential returns per unit of risk. National Atomic Co is currently generating about -0.02 per unit of volatility. If you would invest  3,720  in National Atomic Co on December 22, 2024 and sell it today you would lose (100.00) from holding National Atomic Co or give up 2.69% of portfolio value over 90 days.

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

URU Metals  vs.  National Atomic Co

URU Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days URU Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

National Atomic

Risk-Adjusted Performance

Very Weak

Over the last 90 days National Atomic Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, National Atomic is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with URU Metals and National Atomic

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

The idea behind URU Metals and National Atomic Co 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.