Correlation Between Endeavour Mining and Airbus SE

Can any of the company-specific risk be diversified away by investing in both Endeavour Mining and Airbus SE 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 Airbus SE 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 Airbus SE, you can compare the effects of market volatilities on Endeavour Mining and Airbus SE 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 Airbus SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavour Mining and Airbus SE.

Diversification Opportunities for Endeavour Mining and Airbus SE

-0.64

Correlation Coefficient

Endeavour Mining  Airbus SE

Excellent diversification

The 3 months correlation between Endeavour and Airbus is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining PLC and Airbus SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus SE 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 Airbus SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbus SE has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and Airbus SE go up and down completely randomly.

Pair Corralation between Endeavour Mining and Airbus SE

Assuming the 90 days trading horizon Endeavour Mining is expected to generate 5.13 times less return on investment than Airbus SE. In addition to that, Endeavour Mining is 1.85 times more volatile than Airbus SE. It trades about 0.01 of its total potential returns per unit of risk. Airbus SE is currently generating about 0.06 per unit of volatility. If you would invest  11,309  in Airbus SE on October 23, 2024 and sell it today you would earn a total of  5,055  from holding Airbus SE or generate 44.7% return on investment over 90 days.

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

Endeavour Mining PLC  vs.  Airbus SE

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 unsteady 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.

Airbus SE

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Airbus SE are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Airbus SE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Endeavour Mining and Airbus SE

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

The idea behind Endeavour Mining PLC and Airbus SE 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.