Correlation Between Energy Fuels and Yellow Cake

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

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

Diversification Opportunities for Energy Fuels and Yellow Cake

0.49

Correlation Coefficient

Energy Fuels  Yellow Cake

Very weak diversification

The 3 months correlation between Energy and Yellow is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Energy Fuels and Yellow Cake plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yellow Cake plc 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 Yellow Cake. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yellow Cake plc has no effect on the direction of Energy Fuels i.e., Energy Fuels and Yellow Cake go up and down completely randomly.

Pair Corralation between Energy Fuels and Yellow Cake

Given the investment horizon of 90 days Energy Fuels is expected to under-perform the Yellow Cake. In addition to that, Energy Fuels is 1.28 times more volatile than Yellow Cake plc. It trades about -0.24 of its total potential returns per unit of risk. Yellow Cake plc is currently generating about -0.08 per unit of volatility. If you would invest  674.00  in Yellow Cake plc on December 2, 2024 and sell it today you would lose (92.00) from holding Yellow Cake plc or give up 13.65% of portfolio value over 90 days.

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

Energy Fuels  vs.  Yellow Cake plc

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.

Yellow Cake plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Yellow Cake plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Energy Fuels and Yellow Cake

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

The idea behind Energy Fuels and Yellow Cake plc 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.