Correlation Between Endeavour Mining and International Game

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

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

Diversification Opportunities for Endeavour Mining and International Game

0.55

Correlation Coefficient

Endeavour Mining  International Game

Very weak diversification

The 3 months correlation between Endeavour and International is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining PLC and International Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Game and Endeavour Mining 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 Endeavour Mining PLC are associated (or correlated) with International Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Game has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and International Game go up and down completely randomly.

Pair Corralation between Endeavour Mining and International Game

Assuming the 90 days trading horizon Endeavour Mining PLC is expected to generate 1.18 times more return on investment than International Game. However, Endeavour Mining is 1.18 times more volatile than International Game Technology. It trades about 0.09 of its potential returns per unit of risk. International Game Technology is currently generating about -0.03 per unit of risk. If you would invest  1,769  in Endeavour Mining PLC on October 26, 2024 and sell it today you would earn a total of  55.00  from holding Endeavour Mining PLC or generate 3.11% return on investment over 90 days.

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

Endeavour Mining PLC  vs.  International Game Technology

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.

International Game

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Game Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Endeavour Mining and International Game

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

The idea behind Endeavour Mining PLC and International Game Technology 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.