Correlation Between EnCore Energy and Constellium

Can any of the company-specific risk be diversified away by investing in both EnCore Energy and Constellium 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 Constellium 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 Constellium Nv, you can compare the effects of market volatilities on EnCore Energy and Constellium 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 Constellium. Check out your portfolio center. Please also check ongoing floating volatility patterns of EnCore Energy and Constellium.

Diversification Opportunities for EnCore Energy and Constellium

0.8

Correlation Coefficient

EnCore Energy  Constellium

Very poor diversification

The 3 months correlation between EnCore and Constellium is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding enCore Energy Corp and Constellium Nv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Constellium Nv 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 Constellium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Constellium Nv has no effect on the direction of EnCore Energy i.e., EnCore Energy and Constellium go up and down completely randomly.

Pair Corralation between EnCore Energy and Constellium

Allowing for the 90-day total investment horizon enCore Energy Corp is expected to generate 2.18 times more return on investment than Constellium. However, EnCore Energy is 2.18 times more volatile than Constellium Nv. It trades about 0.21 of its potential returns per unit of risk. Constellium Nv is currently generating about 0.23 per unit of risk. If you would invest  155.00  in enCore Energy Corp on May 1, 2025 and sell it today you would earn a total of  122.00  from holding enCore Energy Corp or generate 78.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

enCore Energy Corp  vs.  Constellium Nv

enCore Energy Corp

Risk-Adjusted Performance

Solid

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

Constellium Nv

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Constellium Nv are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Constellium displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EnCore Energy and Constellium

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

The idea behind enCore Energy Corp and Constellium Nv 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.