Correlation Between Centrus Energy and EnCore Energy

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

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

Diversification Opportunities for Centrus Energy and EnCore Energy

0.04

Correlation Coefficient

Centrus Energy  EnCore Energy

Significant diversification

The 3 months correlation between Centrus and EnCore is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Centrus Energy and enCore Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on enCore Energy Corp and Centrus 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 Centrus Energy are associated (or correlated) with EnCore Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of enCore Energy Corp has no effect on the direction of Centrus Energy i.e., Centrus Energy and EnCore Energy go up and down completely randomly.

Pair Corralation between Centrus Energy and EnCore Energy

Considering the 90-day investment horizon Centrus Energy is expected to generate 2.56 times more return on investment than EnCore Energy. However, Centrus Energy is 2.56 times more volatile than enCore Energy Corp. It trades about 0.16 of its potential returns per unit of risk. enCore Energy Corp is currently generating about -0.05 per unit of risk. If you would invest  3,986  in Centrus Energy on September 14, 2024 and sell it today you would earn a total of  3,250  from holding Centrus Energy or generate 81.54% return on investment over 90 days.

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

Centrus Energy  vs.  enCore Energy Corp

Centrus Energy

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Centrus Energy are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Centrus Energy unveiled solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Centrus Energy and EnCore Energy

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

The idea behind Centrus Energy and enCore 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.