Correlation Between Energy Fuels and Denison Mines

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

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

Diversification Opportunities for Energy Fuels and Denison Mines

0.93

Correlation Coefficient

Energy Fuels  Denison Mines

Almost no diversification

The 3 months correlation between Energy and Denison is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Energy Fuels and Denison Mines Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Denison Mines Corp and Energy Fuels 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 Energy Fuels are associated (or correlated) with Denison Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Denison Mines Corp has no effect on the direction of Energy Fuels i.e., Energy Fuels and Denison Mines go up and down completely randomly.

Pair Corralation between Energy Fuels and Denison Mines

Given the investment horizon of 90 days Energy Fuels is expected to under-perform the Denison Mines. But the stock apears to be less risky and, when comparing its historical volatility, Energy Fuels is 1.09 times less risky than Denison Mines. The stock trades about -0.11 of its potential returns per unit of risk. The Denison Mines Corp is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  184.00  in Denison Mines Corp on December 29, 2024 and sell it today you would lose (45.00) from holding Denison Mines Corp or give up 24.46% of portfolio value over 90 days.

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

Energy Fuels  vs.  Denison Mines Corp

Energy Fuels

Risk-Adjusted Performance

Very Weak

Over the last 90 days Energy Fuels 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 basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Denison Mines Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Denison Mines 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 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.

Pair Trading with Energy Fuels and Denison Mines

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

The idea behind Energy Fuels and Denison Mines Corp 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.