Correlation Between New Age and Traction Uranium
Can any of the company-specific risk be diversified away by investing in both New Age 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 New Age and Traction Uranium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Age Metals and Traction Uranium Corp, you can compare the effects of market volatilities on New Age 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 New Age with a short position of Traction Uranium. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Age and Traction Uranium.
Diversification Opportunities for New Age and Traction Uranium
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between New and Traction is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding New Age Metals 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 New Age 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 New Age Metals 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 New Age i.e., New Age and Traction Uranium go up and down completely randomly.
Pair Corralation between New Age and Traction Uranium
Assuming the 90 days horizon New Age is expected to generate 1.3 times less return on investment than Traction Uranium. But when comparing it to its historical volatility, New Age Metals is 2.2 times less risky than Traction Uranium. It trades about 0.09 of its potential returns per unit of risk. Traction Uranium Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 109.00 in Traction Uranium Corp on September 4, 2024 and sell it today you would lose (89.00) from holding Traction Uranium Corp or give up 81.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.8% |
| Values | Daily Returns |
New Age Metals vs. Traction Uranium Corp
Performance |
| Timeline |
| New Age Metals |
| Traction Uranium Corp |
New Age and Traction Uranium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Age and Traction Uranium
The main advantage of trading using opposite New Age and Traction Uranium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Age 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.| New Age vs. Vision Lithium | New Age vs. Group Ten Metals | New Age vs. Generation Mining Limited | New Age vs. Nickel Creek Platinum |
| Traction Uranium vs. Qubec Nickel Corp | Traction Uranium vs. IGO Limited | Traction Uranium vs. Avarone Metals | Traction Uranium vs. Adriatic Metals PLC |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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