Correlation Between Endeavour Silver and Usha Resources

Can any of the company-specific risk be diversified away by investing in both Endeavour Silver 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 Endeavour Silver and Usha Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Endeavour Silver Corp and Usha Resources, you can compare the effects of market volatilities on Endeavour Silver 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 Endeavour Silver with a short position of Usha Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavour Silver and Usha Resources.

Diversification Opportunities for Endeavour Silver and Usha Resources

0.54

Correlation Coefficient

Endeavour Silver  Usha Resources

Very weak diversification

The 3 months correlation between Endeavour and Usha is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Silver Corp and Usha Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usha Resources and Endeavour Silver 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 Endeavour Silver 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 Endeavour Silver i.e., Endeavour Silver and Usha Resources go up and down completely randomly.

Pair Corralation between Endeavour Silver and Usha Resources

Considering the 90-day investment horizon Endeavour Silver Corp is expected to generate 0.41 times more return on investment than Usha Resources. However, Endeavour Silver Corp is 2.45 times less risky than Usha Resources. It trades about 0.02 of its potential returns per unit of risk. Usha Resources is currently generating about 0.01 per unit of risk. If you would invest  357.00  in Endeavour Silver Corp on October 11, 2024 and sell it today you would lose (4.00) from holding Endeavour Silver Corp or give up 1.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Endeavour Silver Corp  vs.  Usha Resources

Endeavour Silver Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Endeavour Silver Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional 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 Endeavour Silver and Usha Resources

The main advantage of trading using opposite Endeavour Silver and Usha Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endeavour Silver 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 Endeavour Silver Corp 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.