Correlation Between Alamos Gold and Endeavour Mining

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

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

Diversification Opportunities for Alamos Gold and Endeavour Mining

0.94

Correlation Coefficient

Alamos Gold  Endeavour Mining

Almost no diversification

The 3 months correlation between Alamos and Endeavour is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Alamos Gold and Endeavour Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endeavour Mining Corp and Alamos Gold 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 Alamos Gold are associated (or correlated) with Endeavour Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endeavour Mining Corp has no effect on the direction of Alamos Gold i.e., Alamos Gold and Endeavour Mining go up and down completely randomly.

Pair Corralation between Alamos Gold and Endeavour Mining

Assuming the 90 days trading horizon Alamos Gold is expected to generate 0.97 times more return on investment than Endeavour Mining. However, Alamos Gold is 1.03 times less risky than Endeavour Mining. It trades about 0.31 of its potential returns per unit of risk. Endeavour Mining Corp is currently generating about 0.24 per unit of risk. If you would invest  2,649  in Alamos Gold on December 31, 2024 and sell it today you would earn a total of  1,158  from holding Alamos Gold or generate 43.71% return on investment over 90 days.

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

Alamos Gold  vs.  Endeavour Mining Corp

Alamos Gold

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alamos Gold are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal forward indicators, Alamos Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

Endeavour Mining Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Endeavour Mining Corp are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Endeavour Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alamos Gold and Endeavour Mining

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

The idea behind Alamos Gold and Endeavour Mining Corp 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..