Correlation Between Silver Wolf and Usha Resources

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

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

Diversification Opportunities for Silver Wolf and Usha Resources

-0.09

Correlation Coefficient

Silver Wolf  Usha Resources

Good diversification

The 3 months correlation between Silver and Usha is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Silver Wolf Exploration and Usha Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usha Resources and Silver Wolf 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 Silver Wolf Exploration 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 Silver Wolf i.e., Silver Wolf and Usha Resources go up and down completely randomly.

Pair Corralation between Silver Wolf and Usha Resources

Assuming the 90 days horizon Silver Wolf Exploration is expected to generate 1.21 times more return on investment than Usha Resources. However, Silver Wolf is 1.21 times more volatile than Usha Resources. It trades about 0.02 of its potential returns per unit of risk. Usha Resources is currently generating about 0.0 per unit of risk. If you would invest  11.00  in Silver Wolf Exploration on September 12, 2024 and sell it today you would lose (1.28) from holding Silver Wolf Exploration or give up 11.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Silver Wolf Exploration  vs.  Usha Resources

Silver Wolf Exploration

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Silver Wolf Exploration are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Silver Wolf may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 nearly stable basic indicators, Usha Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Silver Wolf and Usha Resources

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

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.