Correlation Between Entree Resources and Cameco Corp
Can any of the company-specific risk be diversified away by investing in both Entree Resources and Cameco Corp 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 Entree Resources and Cameco Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entree Resources and Cameco Corp, you can compare the effects of market volatilities on Entree Resources and Cameco Corp 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 Entree Resources with a short position of Cameco Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entree Resources and Cameco Corp.
Diversification Opportunities for Entree Resources and Cameco Corp
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Entree and Cameco is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Entree Resources and Cameco Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cameco Corp and Entree Resources 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 Entree Resources are associated (or correlated) with Cameco Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cameco Corp has no effect on the direction of Entree Resources i.e., Entree Resources and Cameco Corp go up and down completely randomly.
Pair Corralation between Entree Resources and Cameco Corp
Assuming the 90 days trading horizon Entree Resources is expected to under-perform the Cameco Corp. But the stock apears to be less risky and, when comparing its historical volatility, Entree Resources is 1.86 times less risky than Cameco Corp. The stock trades about -0.13 of its potential returns per unit of risk. The Cameco Corp is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 7,670 in Cameco Corp on November 4, 2024 and sell it today you would lose (483.00) from holding Cameco Corp or give up 6.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Entree Resources vs. Cameco Corp
Performance |
| Timeline |
| Entree Resources |
| Cameco Corp |
Entree Resources and Cameco Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entree Resources and Cameco Corp
The main advantage of trading using opposite Entree Resources and Cameco Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entree Resources position performs unexpectedly, Cameco Corp 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 Cameco Corp will offset losses from the drop in Cameco Corp's long position.| Entree Resources vs. Solitario Exploration Royalty | Entree Resources vs. Globex Mining Enterprises | Entree Resources vs. Northcliff Resources | Entree Resources vs. St Augustine Gold |
| Cameco Corp vs. Denison Mines Corp | Cameco Corp vs. Barrick Gold Corp | Cameco Corp vs. First Quantum Minerals | Cameco Corp vs. Kinross Gold Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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