Correlation Between Centrus Energy and EnCore Energy
Can any of the company-specific risk be diversified away by investing in both Centrus Energy and EnCore Energy 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 Centrus Energy and EnCore Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centrus Energy and enCore Energy Corp, you can compare the effects of market volatilities on Centrus Energy and EnCore Energy 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 Centrus Energy with a short position of EnCore Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrus Energy and EnCore Energy.
Diversification Opportunities for Centrus Energy and EnCore Energy
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Centrus and EnCore is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Centrus Energy and enCore Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on enCore Energy Corp and Centrus 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 Centrus Energy are associated (or correlated) with EnCore Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of enCore Energy Corp has no effect on the direction of Centrus Energy i.e., Centrus Energy and EnCore Energy go up and down completely randomly.
Pair Corralation between Centrus Energy and EnCore Energy
Considering the 90-day investment horizon Centrus Energy is expected to generate 1.59 times more return on investment than EnCore Energy. However, Centrus Energy is 1.59 times more volatile than enCore Energy Corp. It trades about 0.06 of its potential returns per unit of risk. enCore Energy Corp is currently generating about -0.03 per unit of risk. If you would invest 5,455 in Centrus Energy on November 9, 2024 and sell it today you would earn a total of 2,726 from holding Centrus Energy or generate 49.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centrus Energy vs. enCore Energy Corp
Performance |
| Timeline |
| Centrus Energy |
| enCore Energy Corp |
Centrus Energy and EnCore Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centrus Energy and EnCore Energy
The main advantage of trading using opposite Centrus Energy and EnCore Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrus Energy position performs unexpectedly, EnCore Energy 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 EnCore Energy will offset losses from the drop in EnCore Energy's long position.| Centrus Energy vs. Denison Mines Corp | Centrus Energy vs. Energy Fuels | Centrus Energy vs. enCore Energy Corp | Centrus Energy vs. Ur Energy |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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