Correlation Between Bank of Ireland and Endeavour Mining

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

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

Diversification Opportunities for Bank of Ireland and Endeavour Mining

0.58

Correlation Coefficient

Bank of Ireland  Endeavour Mining

Very weak diversification

The 3 months correlation between Bank and Endeavour is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Ireland 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 Bank of Ireland 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 Bank of Ireland 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 Bank of Ireland i.e., Bank of Ireland and Endeavour Mining go up and down completely randomly.

Pair Corralation between Bank of Ireland and Endeavour Mining

Assuming the 90 days trading horizon Bank of Ireland is expected to generate 1.08 times more return on investment than Endeavour Mining. However, Bank of Ireland is 1.08 times more volatile than Endeavour Mining Corp. It trades about 0.02 of its potential returns per unit of risk. Endeavour Mining Corp is currently generating about 0.0 per unit of risk. If you would invest  834.00  in Bank of Ireland on September 26, 2024 and sell it today you would earn a total of  46.00  from holding Bank of Ireland or generate 5.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Bank of Ireland  vs.  Endeavour Mining Corp

Bank of Ireland

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bank of Ireland has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Endeavour Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Endeavour Mining Corp 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 technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Bank of Ireland and Endeavour Mining

The main advantage of trading using opposite Bank of Ireland and Endeavour Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Ireland 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 Bank of Ireland 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.