Correlation Between Energy Fuels and GoviEx Uranium

Can any of the company-specific risk be diversified away by investing in both Energy Fuels and GoviEx 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 GoviEx 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 GoviEx Uranium, you can compare the effects of market volatilities on Energy Fuels and GoviEx 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 GoviEx Uranium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Fuels and GoviEx Uranium.

Diversification Opportunities for Energy Fuels and GoviEx Uranium

0.34

Correlation Coefficient

Energy Fuels  GoviEx Uranium

Weak diversification

The 3 months correlation between Energy and GoviEx is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Energy Fuels and GoviEx Uranium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoviEx 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 GoviEx Uranium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoviEx Uranium has no effect on the direction of Energy Fuels i.e., Energy Fuels and GoviEx Uranium go up and down completely randomly.

Pair Corralation between Energy Fuels and GoviEx Uranium

Given the investment horizon of 90 days Energy Fuels is expected to under-perform the GoviEx Uranium. But the stock apears to be less risky and, when comparing its historical volatility, Energy Fuels is 2.52 times less risky than GoviEx Uranium. The stock trades about -0.11 of its potential returns per unit of risk. The GoviEx Uranium is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  3.10  in GoviEx Uranium on December 29, 2024 and sell it today you would lose (0.10) from holding GoviEx Uranium or give up 3.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Energy Fuels  vs.  GoviEx Uranium

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.

GoviEx Uranium

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Energy Fuels and GoviEx Uranium

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

The idea behind Energy Fuels and GoviEx 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.

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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.