Correlation Between Clifton Mining and Usha Resources

Can any of the company-specific risk be diversified away by investing in both Clifton 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 Clifton 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 Clifton Mining Co and Usha Resources, you can compare the effects of market volatilities on Clifton 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 Clifton Mining with a short position of Usha Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clifton Mining and Usha Resources.

Diversification Opportunities for Clifton Mining and Usha Resources

0.51

Correlation Coefficient

Clifton Mining  Usha Resources

Very weak diversification

The 3 months correlation between Clifton and Usha is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Clifton Mining Co and Usha Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usha Resources and Clifton 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 Clifton Mining Co 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 Clifton Mining i.e., Clifton Mining and Usha Resources go up and down completely randomly.

Pair Corralation between Clifton Mining and Usha Resources

Given the investment horizon of 90 days Clifton Mining Co is expected to under-perform the Usha Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, Clifton Mining Co is 1.2 times less risky than Usha Resources. The pink sheet trades about -0.09 of its potential returns per unit of risk. The Usha Resources is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  3.08  in Usha Resources on October 25, 2024 and sell it today you would lose (0.54) from holding Usha Resources or give up 17.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	85.71%
Values	Daily Returns

Clifton Mining Co  vs.  Usha Resources

Clifton Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clifton Mining Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Usha Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Usha Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Clifton Mining and Usha Resources

The main advantage of trading using opposite Clifton Mining and Usha Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clifton 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.

The idea behind Clifton Mining Co and Usha Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.