Correlation Between Peijia Medical and Endeavour Mining

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

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

Diversification Opportunities for Peijia Medical and Endeavour Mining

0.18

Correlation Coefficient

Peijia Medical  Endeavour Mining

Average diversification

The 3 months correlation between Peijia and Endeavour is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Peijia Medical Limited and Endeavour Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endeavour Mining PLC and Peijia Medical 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 Peijia Medical Limited 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 PLC has no effect on the direction of Peijia Medical i.e., Peijia Medical and Endeavour Mining go up and down completely randomly.

Pair Corralation between Peijia Medical and Endeavour Mining

Assuming the 90 days horizon Peijia Medical Limited is expected to generate 1.57 times more return on investment than Endeavour Mining. However, Peijia Medical is 1.57 times more volatile than Endeavour Mining PLC. It trades about -0.02 of its potential returns per unit of risk. Endeavour Mining PLC is currently generating about -0.13 per unit of risk. If you would invest  47.00  in Peijia Medical Limited on October 26, 2024 and sell it today you would lose (3.00) from holding Peijia Medical Limited or give up 6.38% of portfolio value over 90 days.

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

Peijia Medical Limited  vs.  Endeavour Mining PLC

Peijia Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Peijia Medical Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Peijia Medical is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Endeavour Mining PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Endeavour Mining PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Peijia Medical and Endeavour Mining

The main advantage of trading using opposite Peijia Medical and Endeavour Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peijia Medical 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 Peijia Medical Limited and Endeavour Mining PLC 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.