Correlation Between EnCore Energy and FMC

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Can any of the company-specific risk be diversified away by investing in both EnCore Energy and FMC 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 EnCore Energy and FMC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between enCore Energy Corp and FMC Corporation, you can compare the effects of market volatilities on EnCore Energy and FMC 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 EnCore Energy with a short position of FMC. Check out your portfolio center. Please also check ongoing floating volatility patterns of EnCore Energy and FMC.

Diversification Opportunities for EnCore Energy and FMC

EnCoreFMCDiversified AwayEnCoreFMCDiversified Away100%
0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between EnCore and FMC is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding enCore Energy Corp and FMC Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FMC Corporation and EnCore 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 enCore Energy Corp are associated (or correlated) with FMC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FMC Corporation has no effect on the direction of EnCore Energy i.e., EnCore Energy and FMC go up and down completely randomly.

Pair Corralation between EnCore Energy and FMC

Allowing for the 90-day total investment horizon enCore Energy Corp is expected to generate 0.6 times more return on investment than FMC. However, enCore Energy Corp is 1.67 times less risky than FMC. It trades about -0.19 of its potential returns per unit of risk. FMC Corporation is currently generating about -0.12 per unit of risk. If you would invest  374.00  in enCore Energy Corp on November 26, 2024 and sell it today you would lose (110.00) from holding enCore Energy Corp or give up 29.41% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

enCore Energy Corp  vs.  FMC Corp.

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -30-20-10010
JavaScript chart by amCharts 3.21.15EU FMC
       Timeline  
enCore Energy Corp 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days enCore Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Etf's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb2.62.833.23.43.63.84
FMC Corporation 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days FMC Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb354045505560

EnCore Energy and FMC Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.95-3.71-2.47-1.220.01.082.163.244.32 0.0200.0250.0300.0350.0400.045
JavaScript chart by amCharts 3.21.15EU FMC
       Returns  

Pair Trading with EnCore Energy and FMC

The main advantage of trading using opposite EnCore Energy and FMC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EnCore Energy position performs unexpectedly, FMC 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 FMC will offset losses from the drop in FMC's long position.
The idea behind enCore Energy Corp and FMC Corporation pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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