Correlation Between EnCore Energy and DRDGOLD Limited

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

Diversification Opportunities for EnCore Energy and DRDGOLD Limited

-0.53

Correlation Coefficient

EnCore Energy  DRDGOLD Limited

Excellent diversification

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

Pair Corralation between EnCore Energy and DRDGOLD Limited

Allowing for the 90-day total investment horizon enCore Energy Corp is expected to generate 1.55 times more return on investment than DRDGOLD Limited. However, EnCore Energy is 1.55 times more volatile than DRDGOLD Limited ADR. It trades about 0.18 of its potential returns per unit of risk. DRDGOLD Limited ADR is currently generating about 0.0 per unit of risk. If you would invest  161.00  in enCore Energy Corp on May 2, 2025 and sell it today you would earn a total of  107.00  from holding enCore Energy Corp or generate 66.46% return on investment over 90 days.

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

enCore Energy Corp  vs.  DRDGOLD Limited ADR

enCore Energy Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in enCore Energy Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively sluggish basic indicators, EnCore Energy unveiled solid returns over the last few months and may actually be approaching a breakup point.

DRDGOLD Limited ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days DRDGOLD Limited ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, DRDGOLD Limited is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with EnCore Energy and DRDGOLD Limited

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

The idea behind enCore Energy Corp and DRDGOLD Limited ADR 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..