Correlation Between A W and Enduro Metals

Can any of the company-specific risk be diversified away by investing in both A W and Enduro Metals 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 A W and Enduro Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between A W FOOD and Enduro Metals Corp, you can compare the effects of market volatilities on A W and Enduro Metals 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 A W with a short position of Enduro Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of A W and Enduro Metals.

Diversification Opportunities for A W and Enduro Metals

0.33

Correlation Coefficient

A W  Enduro Metals

Weak diversification

The 3 months correlation between A W and Enduro is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding A W FOOD and Enduro Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enduro Metals Corp and A W 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 A W FOOD are associated (or correlated) with Enduro Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enduro Metals Corp has no effect on the direction of A W i.e., A W and Enduro Metals go up and down completely randomly.

Pair Corralation between A W and Enduro Metals

Assuming the 90 days horizon A W FOOD is expected to under-perform the Enduro Metals. But the stock apears to be less risky and, when comparing its historical volatility, A W FOOD is 3.58 times less risky than Enduro Metals. The stock trades about -0.14 of its potential returns per unit of risk. The Enduro Metals Corp is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  19.00  in Enduro Metals Corp on December 20, 2024 and sell it today you would lose (3.00) from holding Enduro Metals Corp or give up 15.79% of portfolio value over 90 days.

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

A W FOOD  vs.  Enduro Metals Corp

A W FOOD

Risk-Adjusted Performance

Very Weak

Over the last 90 days A W FOOD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Enduro Metals Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enduro Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's fundamental indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with A W and Enduro Metals

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

The idea behind A W FOOD and Enduro Metals 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.