Correlation Between EnCore Energy and Radio Fuels

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

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

Diversification Opportunities for EnCore Energy and Radio Fuels

0.42

Correlation Coefficient

EnCore Energy  Radio Fuels

Very weak diversification

The 3 months correlation between EnCore and Radio is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding enCore Energy Corp and Radio Fuels Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radio Fuels Energy and EnCore 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 enCore Energy Corp are associated (or correlated) with Radio Fuels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radio Fuels Energy has no effect on the direction of EnCore Energy i.e., EnCore Energy and Radio Fuels go up and down completely randomly.

Pair Corralation between EnCore Energy and Radio Fuels

Allowing for the 90-day total investment horizon enCore Energy Corp is expected to under-perform the Radio Fuels. But the etf apears to be less risky and, when comparing its historical volatility, enCore Energy Corp is 5.63 times less risky than Radio Fuels. The etf trades about -0.19 of its potential returns per unit of risk. The Radio Fuels Energy is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  7.94  in Radio Fuels Energy on September 16, 2024 and sell it today you would lose (1.34) from holding Radio Fuels Energy or give up 16.88% of portfolio value over 90 days.

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

enCore Energy Corp  vs.  Radio Fuels Energy

enCore Energy Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days enCore Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest sluggish performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Radio Fuels Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Radio Fuels Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with EnCore Energy and Radio Fuels

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

The idea behind enCore Energy Corp and Radio Fuels Energy 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.