Correlation Between Energy Fuels and Denison Mines
Can any of the company-specific risk be diversified away by investing in both Energy Fuels and Denison Mines 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 Denison Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Fuels and Denison Mines Corp, you can compare the effects of market volatilities on Energy Fuels and Denison Mines 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 Denison Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Fuels and Denison Mines.
Diversification Opportunities for Energy Fuels and Denison Mines
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Energy and Denison is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Energy Fuels and Denison Mines Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Denison Mines Corp 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 Denison Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Denison Mines Corp has no effect on the direction of Energy Fuels i.e., Energy Fuels and Denison Mines go up and down completely randomly.
Pair Corralation between Energy Fuels and Denison Mines
Assuming the 90 days trading horizon Energy Fuels is expected to generate 1.02 times more return on investment than Denison Mines. However, Energy Fuels is 1.02 times more volatile than Denison Mines Corp. It trades about 0.07 of its potential returns per unit of risk. Denison Mines Corp is currently generating about 0.06 per unit of risk. If you would invest 595.00 in Energy Fuels on November 3, 2024 and sell it today you would earn a total of 172.00 from holding Energy Fuels or generate 28.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Fuels vs. Denison Mines Corp
Performance |
| Timeline |
| Energy Fuels |
| Denison Mines Corp |
Energy Fuels and Denison Mines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Fuels and Denison Mines
The main advantage of trading using opposite Energy Fuels and Denison Mines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Fuels position performs unexpectedly, Denison Mines 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 Denison Mines will offset losses from the drop in Denison Mines' long position.| Energy Fuels vs. Highwood Asset Management | Energy Fuels vs. T2 Metals Corp | Energy Fuels vs. Economic Investment Trust | Energy Fuels vs. AGF Management Limited |
| Denison Mines vs. Cameco Corp | Denison Mines vs. Energy Fuels | Denison Mines vs. Ur Energy | Denison Mines 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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