Correlation Between EnCore Energy and First Trust

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

Diversification Opportunities for EnCore Energy and First Trust

0.77

Correlation Coefficient

EnCore Energy  First Trust

Poor diversification

The 3 months correlation between EnCore and First is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding enCore Energy Corp and First Trust Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Institutional 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Institutional has no effect on the direction of EnCore Energy i.e., EnCore Energy and First Trust go up and down completely randomly.

Pair Corralation between EnCore Energy and First Trust

Allowing for the 90-day total investment horizon enCore Energy Corp is expected to generate 28.94 times more return on investment than First Trust. However, EnCore Energy is 28.94 times more volatile than First Trust Institutional. It trades about 0.18 of its potential returns per unit of risk. First Trust Institutional is currently generating about 0.37 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 Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

enCore Energy Corp  vs.  First Trust Institutional

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.

First Trust Institutional

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in First Trust Institutional are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, First Trust is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with EnCore Energy and First Trust

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

The idea behind enCore Energy Corp and First Trust Institutional 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.