Correlation Between Endeavour Mining and MCEWEN MINING

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

Diversification Opportunities for Endeavour Mining and MCEWEN MINING

0.88

Correlation Coefficient

Endeavour Mining  MCEWEN MINING

Very poor diversification

The 3 months correlation between Endeavour and MCEWEN is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining PLC and MCEWEN MINING INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCEWEN MINING INC 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 MCEWEN MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCEWEN MINING INC has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and MCEWEN MINING go up and down completely randomly.

Pair Corralation between Endeavour Mining and MCEWEN MINING

Assuming the 90 days trading horizon Endeavour Mining PLC is expected to under-perform the MCEWEN MINING. But the stock apears to be less risky and, when comparing its historical volatility, Endeavour Mining PLC is 1.68 times less risky than MCEWEN MINING. The stock trades about -0.14 of its potential returns per unit of risk. The MCEWEN MINING INC is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  980.00  in MCEWEN MINING INC on October 25, 2024 and sell it today you would lose (175.00) from holding MCEWEN MINING INC or give up 17.86% of portfolio value over 90 days.

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

Endeavour Mining PLC  vs.  MCEWEN MINING INC

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.

MCEWEN MINING INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MCEWEN MINING INC 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 MCEWEN MINING

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

The idea behind Endeavour Mining PLC and MCEWEN MINING INC 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.