Correlation Between Usha Resources and Eastern Platinum
Can any of the company-specific risk be diversified away by investing in both Usha Resources and Eastern Platinum 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 Usha Resources and Eastern Platinum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Usha Resources and Eastern Platinum Limited, you can compare the effects of market volatilities on Usha Resources and Eastern Platinum 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 Usha Resources with a short position of Eastern Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Usha Resources and Eastern Platinum.
Diversification Opportunities for Usha Resources and Eastern Platinum
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Usha and Eastern is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Usha Resources and Eastern Platinum Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Platinum and Usha Resources 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 Usha Resources are associated (or correlated) with Eastern Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Platinum has no effect on the direction of Usha Resources i.e., Usha Resources and Eastern Platinum go up and down completely randomly.
Pair Corralation between Usha Resources and Eastern Platinum
Assuming the 90 days horizon Usha Resources is expected to under-perform the Eastern Platinum. In addition to that, Usha Resources is 1.36 times more volatile than Eastern Platinum Limited. It trades about -0.05 of its total potential returns per unit of risk. Eastern Platinum Limited is currently generating about 0.0 per unit of volatility. If you would invest 13.00 in Eastern Platinum Limited on November 3, 2024 and sell it today you would lose (2.00) from holding Eastern Platinum Limited or give up 15.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.88% |
| Values | Daily Returns |
Usha Resources vs. Eastern Platinum Limited
Performance |
| Timeline |
| Usha Resources |
| Eastern Platinum |
Usha Resources and Eastern Platinum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Usha Resources and Eastern Platinum
The main advantage of trading using opposite Usha Resources and Eastern Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Usha Resources position performs unexpectedly, Eastern Platinum 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 Eastern Platinum will offset losses from the drop in Eastern Platinum's long position.| Usha Resources vs. Mantaro Silver Corp | Usha Resources vs. Silver Wolf Exploration | Usha Resources vs. Monumental Minerals Corp | Usha Resources vs. Leocor Gold |
| Eastern Platinum vs. Thunder Mountain Gold | Eastern Platinum vs. Chesapeake Gold Corp | Eastern Platinum vs. AbraSilver Resource Corp | Eastern Platinum vs. GoGold Resources |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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