Correlation Between Uranium Energy and Magna International
Can any of the company-specific risk be diversified away by investing in both Uranium Energy and Magna International 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 Uranium Energy and Magna International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uranium Energy Corp and Magna International, you can compare the effects of market volatilities on Uranium Energy and Magna International 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 Uranium Energy with a short position of Magna International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uranium Energy and Magna International.
Diversification Opportunities for Uranium Energy and Magna International
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Uranium and Magna is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Uranium Energy Corp and Magna International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna International and Uranium 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 Uranium Energy Corp are associated (or correlated) with Magna International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magna International has no effect on the direction of Uranium Energy i.e., Uranium Energy and Magna International go up and down completely randomly.
Pair Corralation between Uranium Energy and Magna International
Considering the 90-day investment horizon Uranium Energy Corp is expected to generate 1.73 times more return on investment than Magna International. However, Uranium Energy is 1.73 times more volatile than Magna International. It trades about 0.07 of its potential returns per unit of risk. Magna International is currently generating about -0.01 per unit of risk. If you would invest 341.00 in Uranium Energy Corp on September 3, 2024 and sell it today you would earn a total of 490.00 from holding Uranium Energy Corp or generate 143.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Uranium Energy Corp vs. Magna International
Performance |
| Timeline |
| Uranium Energy Corp |
| Magna International |
Uranium Energy and Magna International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uranium Energy and Magna International
The main advantage of trading using opposite Uranium Energy and Magna International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uranium Energy position performs unexpectedly, Magna International 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 Magna International will offset losses from the drop in Magna International's long position.| Uranium Energy vs. Energy Fuels | Uranium Energy vs. Denison Mines Corp | Uranium Energy vs. Ur Energy | Uranium Energy vs. Cameco Corp |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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