Correlation Between Endeavour Mining and HUTCHISON TELECOMM

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

Diversification Opportunities for Endeavour Mining and HUTCHISON TELECOMM

0.16

Correlation Coefficient

Endeavour Mining  HUTCHISON TELECOMM

Average diversification

The 3 months correlation between Endeavour and HUTCHISON is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining PLC and HUTCHISON TELECOMM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUTCHISON TELECOMM 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 HUTCHISON TELECOMM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUTCHISON TELECOMM has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and HUTCHISON TELECOMM go up and down completely randomly.

Pair Corralation between Endeavour Mining and HUTCHISON TELECOMM

Assuming the 90 days trading horizon Endeavour Mining PLC is expected to generate 0.36 times more return on investment than HUTCHISON TELECOMM. However, Endeavour Mining PLC is 2.76 times less risky than HUTCHISON TELECOMM. It trades about 0.11 of its potential returns per unit of risk. HUTCHISON TELECOMM 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  68.00  from holding Endeavour Mining PLC or generate 3.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Endeavour Mining PLC  vs.  HUTCHISON TELECOMM

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.

HUTCHISON TELECOMM

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HUTCHISON TELECOMM are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, HUTCHISON TELECOMM is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Endeavour Mining and HUTCHISON TELECOMM

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

The idea behind Endeavour Mining PLC and HUTCHISON TELECOMM 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.