Correlation Between Energy Fuels and Cameco Corp
Can any of the company-specific risk be diversified away by investing in both Energy Fuels and Cameco Corp 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 Energy Fuels and Cameco Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Fuels and Cameco Corp, you can compare the effects of market volatilities on Energy Fuels and Cameco Corp 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 Energy Fuels with a short position of Cameco Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Fuels and Cameco Corp.
Diversification Opportunities for Energy Fuels and Cameco Corp
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Energy and Cameco is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Energy Fuels and Cameco Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cameco Corp and Energy Fuels 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 Energy Fuels are associated (or correlated) with Cameco Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cameco Corp has no effect on the direction of Energy Fuels i.e., Energy Fuels and Cameco Corp go up and down completely randomly.
Pair Corralation between Energy Fuels and Cameco Corp
Given the investment horizon of 90 days Energy Fuels is expected to generate 2.87 times less return on investment than Cameco Corp. In addition to that, Energy Fuels is 1.33 times more volatile than Cameco Corp. It trades about 0.02 of its total potential returns per unit of risk. Cameco Corp is currently generating about 0.09 per unit of volatility. If you would invest 2,261 in Cameco Corp on August 24, 2024 and sell it today you would earn a total of 3,832 from holding Cameco Corp or generate 169.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Fuels vs. Cameco Corp
Performance |
| Timeline |
| Energy Fuels |
| Cameco Corp |
Energy Fuels and Cameco Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Fuels and Cameco Corp
The main advantage of trading using opposite Energy Fuels and Cameco Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Fuels position performs unexpectedly, Cameco Corp 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 Cameco Corp will offset losses from the drop in Cameco Corp's long position.| Energy Fuels vs. Uranium Energy Corp | Energy Fuels vs. Denison Mines Corp | Energy Fuels vs. Ur Energy | Energy Fuels vs. NexGen Energy |
| Cameco Corp vs. Energy Fuels | Cameco Corp vs. NexGen Energy | Cameco Corp vs. Uranium Energy Corp | Cameco Corp vs. Ur 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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