Correlation Between McEwen Mining and Usha Resources
Can any of the company-specific risk be diversified away by investing in both McEwen Mining 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 McEwen Mining and Usha Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between McEwen Mining and Usha Resources, you can compare the effects of market volatilities on McEwen Mining 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 McEwen Mining with a short position of Usha Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Usha Resources.
Diversification Opportunities for McEwen Mining and Usha Resources
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between McEwen and Usha is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Usha Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usha Resources and McEwen Mining 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 McEwen Mining 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 McEwen Mining i.e., McEwen Mining and Usha Resources go up and down completely randomly.
Pair Corralation between McEwen Mining and Usha Resources
Considering the 90-day investment horizon McEwen Mining is expected to generate 2.93 times less return on investment than Usha Resources. But when comparing it to its historical volatility, McEwen Mining is 3.35 times less risky than Usha Resources. It trades about 0.04 of its potential returns per unit of risk. 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 | Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
McEwen Mining vs. Usha Resources
Performance |
| Timeline |
| McEwen Mining |
| Usha Resources |
McEwen Mining and Usha Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with McEwen Mining and Usha Resources
The main advantage of trading using opposite McEwen Mining and Usha Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining 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.| McEwen Mining vs. Endeavour Silver Corp | McEwen Mining vs. Fortuna Silver Mines | McEwen Mining vs. New Gold | McEwen Mining vs. Sandstorm Gold Ltd |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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