Correlation Between URU Metals and IShares Physical

Can any of the company-specific risk be diversified away by investing in both URU Metals and IShares Physical 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 URU Metals and IShares Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between URU Metals and iShares Physical Silver, you can compare the effects of market volatilities on URU Metals and IShares Physical 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 URU Metals with a short position of IShares Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of URU Metals and IShares Physical.

Diversification Opportunities for URU Metals and IShares Physical

-0.25

Correlation Coefficient

URU Metals  IShares Physical

Very good diversification

The 3 months correlation between URU and IShares is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding URU Metals and iShares Physical Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Physical Silver and URU Metals 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 URU Metals are associated (or correlated) with IShares Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Physical Silver has no effect on the direction of URU Metals i.e., URU Metals and IShares Physical go up and down completely randomly.

Pair Corralation between URU Metals and IShares Physical

Assuming the 90 days trading horizon URU Metals is expected to generate 4.32 times more return on investment than IShares Physical. However, URU Metals is 4.32 times more volatile than iShares Physical Silver. It trades about 0.03 of its potential returns per unit of risk. iShares Physical Silver is currently generating about 0.04 per unit of risk. If you would invest  15,000  in URU Metals on October 11, 2024 and sell it today you would earn a total of  1,000.00  from holding URU Metals or generate 6.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

URU Metals  vs.  iShares Physical Silver

URU Metals

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in URU Metals are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, URU Metals exhibited solid returns over the last few months and may actually be approaching a breakup point.

iShares Physical Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares Physical Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, IShares Physical is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with URU Metals and IShares Physical

The main advantage of trading using opposite URU Metals and IShares Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if URU Metals position performs unexpectedly, IShares Physical 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 IShares Physical will offset losses from the drop in IShares Physical's long position.

The idea behind URU Metals and iShares Physical Silver 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.