Correlation Between Energy Fuels and Elevate Uranium

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

By analyzing existing cross correlation between Energy Fuels and Elevate Uranium, you can compare the effects of market volatilities on Energy Fuels and Elevate Uranium 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 Elevate Uranium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Fuels and Elevate Uranium.

Diversification Opportunities for Energy Fuels and Elevate Uranium

0.1

Correlation Coefficient

Energy Fuels  Elevate Uranium

Average diversification

The 3 months correlation between Energy and Elevate is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Energy Fuels and Elevate Uranium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elevate Uranium 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 Elevate Uranium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elevate Uranium has no effect on the direction of Energy Fuels i.e., Energy Fuels and Elevate Uranium go up and down completely randomly.

Pair Corralation between Energy Fuels and Elevate Uranium

Given the investment horizon of 90 days Energy Fuels is expected to generate 0.47 times more return on investment than Elevate Uranium. However, Energy Fuels is 2.14 times less risky than Elevate Uranium. It trades about 0.21 of its potential returns per unit of risk. Elevate Uranium is currently generating about 0.05 per unit of risk. If you would invest  440.00  in Energy Fuels on September 3, 2024 and sell it today you would earn a total of  286.00  from holding Energy Fuels or generate 65.0% return on investment over 90 days.

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

Energy Fuels  vs.  Elevate Uranium

Energy Fuels

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Energy Fuels are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Energy Fuels unveiled solid returns over the last few months and may actually be approaching a breakup point.

Elevate Uranium

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Elevate Uranium are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Elevate Uranium reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Energy Fuels and Elevate Uranium

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

The idea behind Energy Fuels and Elevate Uranium 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.