Correlation Between Endeavour Mining and COMINTL BANK

Can any of the company-specific risk be diversified away by investing in both Endeavour Mining and COMINTL BANK 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 COMINTL BANK 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 COMINTL BANK ADR1, you can compare the effects of market volatilities on Endeavour Mining and COMINTL BANK 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 COMINTL BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavour Mining and COMINTL BANK.

Diversification Opportunities for Endeavour Mining and COMINTL BANK

-0.55

Correlation Coefficient

Endeavour Mining  COMINTL BANK

Excellent diversification

The 3 months correlation between Endeavour and COMINTL is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining PLC and COMINTL BANK ADR1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMINTL BANK ADR1 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 COMINTL BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMINTL BANK ADR1 has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and COMINTL BANK go up and down completely randomly.

Pair Corralation between Endeavour Mining and COMINTL BANK

Assuming the 90 days trading horizon Endeavour Mining PLC is expected to generate 1.15 times more return on investment than COMINTL BANK. However, Endeavour Mining is 1.15 times more volatile than COMINTL BANK ADR1. It trades about 0.04 of its potential returns per unit of risk. COMINTL BANK ADR1 is currently generating about -0.09 per unit of risk. If you would invest  1,778  in Endeavour Mining PLC on October 22, 2024 and sell it today you would earn a total of  20.00  from holding Endeavour Mining PLC or generate 1.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.75%
Values	Daily Returns

Endeavour Mining PLC  vs.  COMINTL BANK ADR1

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.

COMINTL BANK ADR1

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in COMINTL BANK ADR1 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, COMINTL BANK is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Endeavour Mining and COMINTL BANK

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

The idea behind Endeavour Mining PLC and COMINTL BANK ADR1 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.