Correlation Between MCF Energy and Traction Uranium
Can any of the company-specific risk be diversified away by investing in both MCF Energy and Traction 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 MCF Energy and Traction Uranium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MCF Energy and Traction Uranium Corp, you can compare the effects of market volatilities on MCF Energy and Traction 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 MCF Energy with a short position of Traction Uranium. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCF Energy and Traction Uranium.
Diversification Opportunities for MCF Energy and Traction Uranium
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between MCF and Traction is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding MCF Energy and Traction Uranium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Traction Uranium Corp and MCF 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 MCF Energy are associated (or correlated) with Traction Uranium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Traction Uranium Corp has no effect on the direction of MCF Energy i.e., MCF Energy and Traction Uranium go up and down completely randomly.
Pair Corralation between MCF Energy and Traction Uranium
Assuming the 90 days horizon MCF Energy is expected to generate 1.39 times less return on investment than Traction Uranium. But when comparing it to its historical volatility, MCF Energy is 1.7 times less risky than Traction Uranium. It trades about 0.15 of its potential returns per unit of risk. Traction Uranium Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Traction Uranium Corp on November 27, 2024 and sell it today you would earn a total of 3.00 from holding Traction Uranium Corp or generate 17.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
MCF Energy vs. Traction Uranium Corp
Performance |
| Timeline |
| MCF Energy |
| Traction Uranium Corp |
MCF Energy and Traction Uranium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCF Energy and Traction Uranium
The main advantage of trading using opposite MCF Energy and Traction Uranium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCF Energy position performs unexpectedly, Traction 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 Traction Uranium will offset losses from the drop in Traction Uranium's long position.| MCF Energy vs. Viemed Healthcare | MCF Energy vs. Yirendai | MCF Energy vs. Encore Capital Group | MCF Energy vs. Ardelyx |
| Traction Uranium vs. New Age Metals | Traction Uranium vs. York Harbour Metals | Traction Uranium vs. Silver Elephant Mining | Traction Uranium vs. First Energy Metals |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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