Correlation Between AmTrust Financial and Uranium Energy

Can any of the company-specific risk be diversified away by investing in both AmTrust Financial and Uranium 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 AmTrust Financial and Uranium Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AmTrust Financial Services and Uranium Energy Corp, you can compare the effects of market volatilities on AmTrust Financial and Uranium 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 AmTrust Financial with a short position of Uranium Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of AmTrust Financial and Uranium Energy.

Diversification Opportunities for AmTrust Financial and Uranium Energy

0.53

Correlation Coefficient

AmTrust Financial  Uranium Energy

Very weak diversification

The 3 months correlation between AmTrust and Uranium is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding AmTrust Financial Services and Uranium Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uranium Energy Corp and AmTrust Financial 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 AmTrust Financial Services are associated (or correlated) with Uranium Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uranium Energy Corp has no effect on the direction of AmTrust Financial i.e., AmTrust Financial and Uranium Energy go up and down completely randomly.

Pair Corralation between AmTrust Financial and Uranium Energy

Assuming the 90 days horizon AmTrust Financial is expected to generate 5.4 times less return on investment than Uranium Energy. But when comparing it to its historical volatility, AmTrust Financial Services is 1.9 times less risky than Uranium Energy. It trades about 0.08 of its potential returns per unit of risk. Uranium Energy Corp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  508.00  in Uranium Energy Corp on September 13, 2024 and sell it today you would earn a total of  310.00  from holding Uranium Energy Corp or generate 61.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

AmTrust Financial Services  vs.  Uranium Energy Corp

AmTrust Financial

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AmTrust Financial Services are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating forward indicators, AmTrust Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Uranium Energy Corp

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Uranium Energy Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Uranium Energy exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AmTrust Financial and Uranium Energy

The main advantage of trading using opposite AmTrust Financial and Uranium Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AmTrust Financial position performs unexpectedly, Uranium 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 Uranium Energy will offset losses from the drop in Uranium Energy's long position.

The idea behind AmTrust Financial Services and Uranium Energy Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.