Correlation Between EnCore Energy and Peabody Energy
Can any of the company-specific risk be diversified away by investing in both EnCore Energy and Peabody 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 EnCore Energy and Peabody Energy 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 Peabody Energy Corp, you can compare the effects of market volatilities on EnCore Energy and Peabody 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 EnCore Energy with a short position of Peabody Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of EnCore Energy and Peabody Energy.
Diversification Opportunities for EnCore Energy and Peabody Energy
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EnCore and Peabody is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding enCore Energy Corp and Peabody Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peabody Energy Corp 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 Peabody Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peabody Energy Corp has no effect on the direction of EnCore Energy i.e., EnCore Energy and Peabody Energy go up and down completely randomly.
Pair Corralation between EnCore Energy and Peabody Energy
Allowing for the 90-day total investment horizon enCore Energy Corp is expected to generate 1.4 times more return on investment than Peabody Energy. However, EnCore Energy is 1.4 times more volatile than Peabody Energy Corp. It trades about -0.02 of its potential returns per unit of risk. Peabody Energy Corp is currently generating about -0.04 per unit of risk. If you would invest 419.00 in enCore Energy Corp on March 22, 2024 and sell it today you would lose (16.50) from holding enCore Energy Corp or give up 3.94% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
enCore Energy Corp vs. Peabody Energy Corp
Performance |
Timeline |
enCore Energy Corp |
Peabody Energy Corp |
EnCore Energy and Peabody Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with EnCore Energy and Peabody Energy
The main advantage of trading using opposite EnCore Energy and Peabody Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EnCore Energy position performs unexpectedly, Peabody 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 Peabody Energy will offset losses from the drop in Peabody Energy's long position.EnCore Energy vs. Cameco Corp | EnCore Energy vs. Denison Mines Corp | EnCore Energy vs. Centrus Energy | EnCore Energy vs. NexGen Energy |
Peabody Energy vs. Natural Resource Partners | Peabody Energy vs. NACCO Industries | Peabody Energy vs. Indo Tambangraya Megah | Peabody Energy vs. Adaro Energy Tbk |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |