Correlation Between Energy Fuels and Global X

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

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

Diversification Opportunities for Energy Fuels and Global X

0.85

Correlation Coefficient

Energy Fuels  Global X

Very poor diversification

The 3 months correlation between Energy and Global is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Energy Fuels and Global X Uranium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Uranium has no effect on the direction of Energy Fuels i.e., Energy Fuels and Global X go up and down completely randomly.

Pair Corralation between Energy Fuels and Global X

Given the investment horizon of 90 days Energy Fuels is expected to generate 1.23 times less return on investment than Global X. In addition to that, Energy Fuels is 1.59 times more volatile than Global X Uranium. It trades about 0.01 of its total potential returns per unit of risk. Global X Uranium is currently generating about 0.01 per unit of volatility. If you would invest  2,343  in Global X Uranium on December 4, 2024 and sell it today you would earn a total of  6.00  from holding Global X Uranium or generate 0.26% return on investment over 90 days.

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

Energy Fuels  vs.  Global X 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.

Global X Uranium

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global X Uranium has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Etf's basic indicators remain somewhat 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 ETF investors.

Pair Trading with Energy Fuels and Global X

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

The idea behind Energy Fuels and Global X 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.