Correlation Between Energy Fuels and Peninsula Energy
Can any of the company-specific risk be diversified away by investing in both Energy Fuels and Peninsula Energy 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 Peninsula Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Fuels and Peninsula Energy, you can compare the effects of market volatilities on Energy Fuels and Peninsula Energy 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 Peninsula Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Fuels and Peninsula Energy.
Diversification Opportunities for Energy Fuels and Peninsula Energy
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Energy and Peninsula is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Energy Fuels and Peninsula Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peninsula Energy 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 Peninsula Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peninsula Energy has no effect on the direction of Energy Fuels i.e., Energy Fuels and Peninsula Energy go up and down completely randomly.
Pair Corralation between Energy Fuels and Peninsula Energy
Given the investment horizon of 90 days Energy Fuels is expected to generate 45.27 times less return on investment than Peninsula Energy. But when comparing it to its historical volatility, Energy Fuels is 68.21 times less risky than Peninsula Energy. It trades about 0.37 of its potential returns per unit of risk. Peninsula Energy is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 6.10 in Peninsula Energy on September 3, 2024 and sell it today you would earn a total of 72.90 from holding Peninsula Energy or generate 1195.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 80.0% |
| Values | Daily Returns |
Energy Fuels vs. Peninsula Energy
Performance |
| Timeline |
| Energy Fuels |
| Peninsula Energy |
Energy Fuels and Peninsula Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Fuels and Peninsula Energy
The main advantage of trading using opposite Energy Fuels and Peninsula Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Fuels position performs unexpectedly, Peninsula Energy 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 Peninsula Energy will offset losses from the drop in Peninsula Energy'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 |
| Peninsula Energy vs. Elevate Uranium | Peninsula Energy vs. Sprott Physical Uranium | Peninsula Energy vs. Energy Fuels | Peninsula Energy vs. ValOre Metals Corp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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