Correlation Between Fortuna Silver and Endeavour Mining

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

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

Diversification Opportunities for Fortuna Silver and Endeavour Mining

0.45

Correlation Coefficient

Fortuna Silver  Endeavour Mining

Very weak diversification

The 3 months correlation between Fortuna and Endeavour is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Fortuna Silver Mines and Endeavour Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endeavour Mining Corp and Fortuna 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 Fortuna Silver Mines are associated (or correlated) with Endeavour Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endeavour Mining Corp has no effect on the direction of Fortuna Silver i.e., Fortuna Silver and Endeavour Mining go up and down completely randomly.

Pair Corralation between Fortuna Silver and Endeavour Mining

Assuming the 90 days trading horizon Fortuna Silver Mines is expected to generate 1.0 times more return on investment than Endeavour Mining. However, Fortuna Silver Mines is 1.0 times less risky than Endeavour Mining. It trades about -0.05 of its potential returns per unit of risk. Endeavour Mining Corp is currently generating about -0.06 per unit of risk. If you would invest  650.00  in Fortuna Silver Mines on October 10, 2024 and sell it today you would lose (8.00) from holding Fortuna Silver Mines or give up 1.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	40.0%
Values	Daily Returns

Fortuna Silver Mines  vs.  Endeavour Mining Corp

Fortuna Silver Mines

Risk-Adjusted Performance

0 of 100

Very Weak

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

Endeavour Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Endeavour Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Fortuna Silver and Endeavour Mining

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

The idea behind Fortuna Silver Mines and Endeavour Mining Corp 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.