Correlation Between American Copper and Usha Resources
Can any of the company-specific risk be diversified away by investing in both American Copper and Usha Resources 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 American Copper and Usha Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Copper Development and Usha Resources, you can compare the effects of market volatilities on American Copper and Usha Resources 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 American Copper with a short position of Usha Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Copper and Usha Resources.
Diversification Opportunities for American Copper and Usha Resources
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between American and Usha is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding American Copper Development and Usha Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usha Resources and American Copper 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 American Copper Development are associated (or correlated) with Usha Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Usha Resources has no effect on the direction of American Copper i.e., American Copper and Usha Resources go up and down completely randomly.
Pair Corralation between American Copper and Usha Resources
Assuming the 90 days horizon American Copper Development is expected to generate 2.28 times more return on investment than Usha Resources. However, American Copper is 2.28 times more volatile than Usha Resources. It trades about 0.06 of its potential returns per unit of risk. Usha Resources is currently generating about -0.05 per unit of risk. If you would invest 4.20 in American Copper Development on November 3, 2024 and sell it today you would lose (1.80) from holding American Copper Development or give up 42.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
American Copper Development vs. Usha Resources
Performance |
| Timeline |
| American Copper Deve |
| Usha Resources |
American Copper and Usha Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Copper and Usha Resources
The main advantage of trading using opposite American Copper and Usha Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Copper position performs unexpectedly, Usha Resources 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 Usha Resources will offset losses from the drop in Usha Resources' long position.| American Copper vs. Marine Products | American Copper vs. ANTA Sports Products | American Copper vs. SunOpta | American Copper vs. Cardinal Health |
| Usha Resources vs. Mantaro Silver Corp | Usha Resources vs. Silver Wolf Exploration | Usha Resources vs. Monumental Minerals Corp | Usha Resources vs. Leocor Gold |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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