Correlation Between Cameco Corp and Baselode Energy

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

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

Diversification Opportunities for Cameco Corp and Baselode Energy

-0.16

Correlation Coefficient

Cameco Corp  Baselode Energy

Good diversification

The 3 months correlation between Cameco and Baselode is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Cameco Corp and Baselode Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baselode Energy Corp and Cameco Corp 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 Cameco Corp are associated (or correlated) with Baselode Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baselode Energy Corp has no effect on the direction of Cameco Corp i.e., Cameco Corp and Baselode Energy go up and down completely randomly.

Pair Corralation between Cameco Corp and Baselode Energy

Assuming the 90 days trading horizon Cameco Corp is expected to generate 0.4 times more return on investment than Baselode Energy. However, Cameco Corp is 2.5 times less risky than Baselode Energy. It trades about 0.41 of its potential returns per unit of risk. Baselode Energy Corp is currently generating about 0.05 per unit of risk. If you would invest  5,554  in Cameco Corp on April 22, 2025 and sell it today you would earn a total of  5,280  from holding Cameco Corp or generate 95.07% return on investment over 90 days.

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

Cameco Corp  vs.  Baselode Energy Corp

Cameco Corp

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Cameco Corp are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Cameco Corp displayed solid returns over the last few months and may actually be approaching a breakup point.

Baselode Energy Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Baselode Energy Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Baselode Energy showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cameco Corp and Baselode Energy

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

The idea behind Cameco Corp and Baselode 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.