Correlation Between Cameco Corp and Sprott Uranium
Can any of the company-specific risk be diversified away by investing in both Cameco Corp and Sprott 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 Cameco Corp and Sprott Uranium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cameco Corp and Sprott Uranium Miners, you can compare the effects of market volatilities on Cameco Corp and Sprott 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 Cameco Corp with a short position of Sprott Uranium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cameco Corp and Sprott Uranium.
Diversification Opportunities for Cameco Corp and Sprott Uranium
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cameco and Sprott is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Cameco Corp and Sprott Uranium Miners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Uranium Miners and Cameco Corp 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 Cameco Corp are associated (or correlated) with Sprott Uranium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Uranium Miners has no effect on the direction of Cameco Corp i.e., Cameco Corp and Sprott Uranium go up and down completely randomly.
Pair Corralation between Cameco Corp and Sprott Uranium
Considering the 90-day investment horizon Cameco Corp is expected to generate 1.2 times more return on investment than Sprott Uranium. However, Cameco Corp is 1.2 times more volatile than Sprott Uranium Miners. It trades about 0.1 of its potential returns per unit of risk. Sprott Uranium Miners is currently generating about -0.03 per unit of risk. If you would invest 5,477 in Cameco Corp on August 30, 2024 and sell it today you would earn a total of 304.00 from holding Cameco Corp or generate 5.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cameco Corp vs. Sprott Uranium Miners
Performance |
| Timeline |
| Cameco Corp |
| Sprott Uranium Miners |
Cameco Corp and Sprott Uranium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cameco Corp and Sprott Uranium
The main advantage of trading using opposite Cameco Corp and Sprott Uranium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cameco Corp position performs unexpectedly, Sprott 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 Sprott Uranium will offset losses from the drop in Sprott Uranium's long position.| Cameco Corp vs. Energy Fuels | Cameco Corp vs. NexGen Energy | Cameco Corp vs. Uranium Energy Corp | Cameco Corp vs. Ur Energy |
| Sprott Uranium vs. Global X Uranium | Sprott Uranium vs. Sprott Physical Uranium | Sprott Uranium vs. Energy Fuels | Sprott Uranium vs. NexGen 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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