Correlation Between Canaf Investments and Energy Fuels
Can any of the company-specific risk be diversified away by investing in both Canaf Investments and Energy Fuels 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 Canaf Investments and Energy Fuels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canaf Investments and Energy Fuels, you can compare the effects of market volatilities on Canaf Investments and Energy Fuels 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 Canaf Investments with a short position of Energy Fuels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canaf Investments and Energy Fuels.
Diversification Opportunities for Canaf Investments and Energy Fuels
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Canaf and Energy is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Canaf Investments and Energy Fuels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Fuels and Canaf Investments 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 Canaf Investments are associated (or correlated) with Energy Fuels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Fuels has no effect on the direction of Canaf Investments i.e., Canaf Investments and Energy Fuels go up and down completely randomly.
Pair Corralation between Canaf Investments and Energy Fuels
Assuming the 90 days horizon Canaf Investments is expected to under-perform the Energy Fuels. In addition to that, Canaf Investments is 1.09 times more volatile than Energy Fuels. It trades about -0.07 of its total potential returns per unit of risk. Energy Fuels is currently generating about 0.4 per unit of volatility. If you would invest 778.00 in Energy Fuels on September 2, 2024 and sell it today you would earn a total of 241.00 from holding Energy Fuels or generate 30.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canaf Investments vs. Energy Fuels
Performance |
| Timeline |
| Canaf Investments |
| Energy Fuels |
Canaf Investments and Energy Fuels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canaf Investments and Energy Fuels
The main advantage of trading using opposite Canaf Investments and Energy Fuels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canaf Investments position performs unexpectedly, Energy Fuels 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 Energy Fuels will offset losses from the drop in Energy Fuels' long position.| Canaf Investments vs. First Majestic Silver | Canaf Investments vs. Ivanhoe Energy | Canaf Investments vs. Orezone Gold Corp | Canaf Investments vs. Faraday Copper Corp |
| Energy Fuels vs. Rocky Mountain Liquor | Energy Fuels vs. Precision Drilling | Energy Fuels vs. Brookfield Investments | Energy Fuels vs. Canaf Investments |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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