The Paladin Energy Ltd (ASX: PDN) share price is down almost 9% on Wednesday, trading at 72.5 cents at the time of writing.
Despite no market-sensitive updates from the company today, investors continue selling off Paladin shares, extending the company's losses to more than 17% for the year to date.
In broader market moves, the S&P/ASX 200 Energy Index (ASX: XEJ) is also trading around 0.26% lower after cooling off in recent weeks.
What's up with the Paladin Energy share price?
Energy stocks soared to stardom in early 2022 as prices for their underlying commodities raced to multi-year highs.
Prices for the nuclear energy source uranium exploded in February amid concern in global energy markets about conflict in Europe.
Traders drove the price of uranium above its 10-year highs where it peaked at US$64.50 per pound in April, before receding to its 2021 levels again.
It is still up 54% year on year despite an 11% consolidation in the past month of trade.
With Paladin restarting the Langer Heinrich uranium mine in Namibia, the company is aiming to "take advantage of the improving uranium market conditions and deliver sustainable value creation", according to its CEO Ian Purdy.
It appears market pundits are continuing to trade Paladin shares in response to volatility in the underlying uranium market.
The graph below illustrates the correlation between the price of the June 2022 uranium futures contract (in yellow), the broad energy index (XEJ in red), and the Paladin Energy share price (in blue) since March.
As seen above, both the Paladin Energy share price and the price for uranium have started to diverge from the wider energy sector, with all three recording losses in May.
In the last 12 months, the Paladin Energy share price has gained 46%, trading as high as $1.03 and as low as 63.5 cents since September 2021.
