Correlation Between Aura Energy and Sprott Physical
Can any of the company-specific risk be diversified away by investing in both Aura Energy and Sprott Physical 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 Aura Energy and Sprott Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aura Energy Limited and Sprott Physical Uranium, you can compare the effects of market volatilities on Aura Energy and Sprott Physical 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 Aura Energy with a short position of Sprott Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aura Energy and Sprott Physical.
Diversification Opportunities for Aura Energy and Sprott Physical
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aura and Sprott is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Aura Energy Limited and Sprott Physical Uranium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Physical Uranium and Aura Energy 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 Aura Energy Limited are associated (or correlated) with Sprott Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Physical Uranium has no effect on the direction of Aura Energy i.e., Aura Energy and Sprott Physical go up and down completely randomly.
Pair Corralation between Aura Energy and Sprott Physical
Assuming the 90 days horizon Aura Energy Limited is expected to generate 7.5 times more return on investment than Sprott Physical. However, Aura Energy is 7.5 times more volatile than Sprott Physical Uranium. It trades about 0.08 of its potential returns per unit of risk. Sprott Physical Uranium is currently generating about 0.09 per unit of risk. If you would invest 8.10 in Aura Energy Limited on September 5, 2024 and sell it today you would lose (0.10) from holding Aura Energy Limited or give up 1.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aura Energy Limited vs. Sprott Physical Uranium
Performance |
| Timeline |
| Aura Energy Limited |
| Sprott Physical Uranium |
Aura Energy and Sprott Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aura Energy and Sprott Physical
The main advantage of trading using opposite Aura Energy and Sprott Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aura Energy position performs unexpectedly, Sprott Physical 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 Sprott Physical will offset losses from the drop in Sprott Physical's long position.| Aura Energy vs. Elevate Uranium | Aura Energy vs. Sprott Physical Uranium | Aura Energy vs. Energy Fuels | Aura Energy vs. ValOre Metals Corp |
| Sprott Physical vs. Denison Mines Corp | Sprott Physical vs. Energy Fuels | Sprott Physical vs. enCore Energy Corp | Sprott Physical vs. Ur Energy |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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