Correlation Between Chesapeake Gold and Usha Resources
Can any of the company-specific risk be diversified away by investing in both Chesapeake Gold 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 Chesapeake Gold and Usha Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Gold Corp and Usha Resources, you can compare the effects of market volatilities on Chesapeake Gold 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 Chesapeake Gold with a short position of Usha Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Gold and Usha Resources.
Diversification Opportunities for Chesapeake Gold and Usha Resources
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Chesapeake and Usha is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Gold Corp and Usha Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usha Resources and Chesapeake Gold 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 Chesapeake Gold Corp 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 Chesapeake Gold i.e., Chesapeake Gold and Usha Resources go up and down completely randomly.
Pair Corralation between Chesapeake Gold and Usha Resources
Assuming the 90 days horizon Chesapeake Gold Corp is expected to under-perform the Usha Resources. But the otc stock apears to be less risky and, when comparing its historical volatility, Chesapeake Gold Corp is 2.3 times less risky than Usha Resources. The otc stock trades about -0.01 of its potential returns per unit of risk. The Usha Resources is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4.98 in Usha Resources on November 3, 2024 and sell it today you would lose (2.27) from holding Usha Resources or give up 45.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Chesapeake Gold Corp vs. Usha Resources
Performance |
| Timeline |
| Chesapeake Gold Corp |
| Usha Resources |
Chesapeake Gold and Usha Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Gold and Usha Resources
The main advantage of trading using opposite Chesapeake Gold and Usha Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Gold 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.| Chesapeake Gold vs. Eastern Platinum Limited | Chesapeake Gold vs. Thunder Mountain Gold | Chesapeake Gold vs. AbraSilver Resource Corp | Chesapeake Gold vs. Provenance Gold Corp |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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