Correlation Between Sprott Uranium and Energy Fuels
Can any of the company-specific risk be diversified away by investing in both Sprott Uranium and Energy Fuels 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 Sprott Uranium and Energy Fuels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sprott Uranium Miners and Energy Fuels, you can compare the effects of market volatilities on Sprott Uranium and Energy Fuels 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 Sprott Uranium with a short position of Energy Fuels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sprott Uranium and Energy Fuels.
Diversification Opportunities for Sprott Uranium and Energy Fuels
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sprott and Energy is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Uranium Miners and Energy Fuels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Fuels and Sprott Uranium 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 Sprott Uranium Miners are associated (or correlated) with Energy Fuels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Fuels has no effect on the direction of Sprott Uranium i.e., Sprott Uranium and Energy Fuels go up and down completely randomly.
Pair Corralation between Sprott Uranium and Energy Fuels
Given the investment horizon of 90 days Sprott Uranium Miners is expected to under-perform the Energy Fuels. But the etf apears to be less risky and, when comparing its historical volatility, Sprott Uranium Miners is 1.77 times less risky than Energy Fuels. The etf trades about -0.03 of its potential returns per unit of risk. The Energy Fuels is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 642.00 in Energy Fuels on August 30, 2024 and sell it today you would earn a total of 38.00 from holding Energy Fuels or generate 5.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sprott Uranium Miners vs. Energy Fuels
Performance |
| Timeline |
| Sprott Uranium Miners |
| Energy Fuels |
Sprott Uranium and Energy Fuels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sprott Uranium and Energy Fuels
The main advantage of trading using opposite Sprott Uranium and Energy Fuels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sprott Uranium position performs unexpectedly, Energy Fuels 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 Energy Fuels will offset losses from the drop in Energy Fuels' long position.| Sprott Uranium vs. Global X Uranium | Sprott Uranium vs. Sprott Physical Uranium | Sprott Uranium vs. Energy Fuels | Sprott Uranium vs. NexGen Energy |
| Energy Fuels vs. Uranium Energy Corp | Energy Fuels vs. Denison Mines Corp | Energy Fuels vs. Ur Energy | Energy Fuels vs. NexGen Energy |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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