Correlation Between Baker Hughes and Endeavour Mining

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Can any of the company-specific risk be diversified away by investing in both Baker Hughes 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 Baker Hughes and Endeavour Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baker Hughes Co and Endeavour Mining PLC, you can compare the effects of market volatilities on Baker Hughes 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 Baker Hughes with a short position of Endeavour Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baker Hughes and Endeavour Mining.

Diversification Opportunities for Baker Hughes and Endeavour Mining

BakerEndeavourDiversified AwayBakerEndeavourDiversified Away100%
-0.15
  Correlation Coefficient

Good diversification

The 3 months correlation between Baker and Endeavour is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Baker Hughes Co 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 Baker Hughes 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 Baker Hughes Co 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 Baker Hughes i.e., Baker Hughes and Endeavour Mining go up and down completely randomly.

Pair Corralation between Baker Hughes and Endeavour Mining

Assuming the 90 days horizon Baker Hughes Co is expected to generate 1.08 times more return on investment than Endeavour Mining. However, Baker Hughes is 1.08 times more volatile than Endeavour Mining PLC. It trades about 0.21 of its potential returns per unit of risk. Endeavour Mining PLC is currently generating about -0.14 per unit of risk. If you would invest  3,403  in Baker Hughes Co on October 25, 2024 and sell it today you would earn a total of  1,010  from holding Baker Hughes Co or generate 29.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Baker Hughes Co  vs.  Endeavour Mining PLC

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -20-15-10-50510
JavaScript chart by amCharts 3.21.1568V 6E2
       Timeline  
Baker Hughes 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Baker Hughes Co are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Baker Hughes reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan34363840424446
Endeavour Mining PLC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan171819202122

Baker Hughes and Endeavour Mining Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.64-4.97-3.3-1.64-0.02781.773.635.497.359.22 0.020.030.040.050.060.070.08
JavaScript chart by amCharts 3.21.1568V 6E2
       Returns  

Pair Trading with Baker Hughes and Endeavour Mining

The main advantage of trading using opposite Baker Hughes and Endeavour Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baker Hughes 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 Baker Hughes Co 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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