Correlation Between Carlin Gold and Endurance Gold

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

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

Diversification Opportunities for Carlin Gold and Endurance Gold

-0.26

Correlation Coefficient

Carlin Gold  Endurance Gold

Very good diversification

The 3 months correlation between Carlin and Endurance is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Carlin Gold and Endurance Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endurance Gold Corp and Carlin 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 Carlin Gold are associated (or correlated) with Endurance Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endurance Gold Corp has no effect on the direction of Carlin Gold i.e., Carlin Gold and Endurance Gold go up and down completely randomly.

Pair Corralation between Carlin Gold and Endurance Gold

Assuming the 90 days horizon Carlin Gold is expected to generate 1.59 times more return on investment than Endurance Gold. However, Carlin Gold is 1.59 times more volatile than Endurance Gold Corp. It trades about 0.11 of its potential returns per unit of risk. Endurance Gold Corp is currently generating about 0.02 per unit of risk. If you would invest  15.00  in Carlin Gold on December 30, 2024 and sell it today you would earn a total of  6.00  from holding Carlin Gold or generate 40.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Carlin Gold  vs.  Endurance Gold Corp

Carlin Gold

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Carlin Gold are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Carlin Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Endurance Gold Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Endurance Gold Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Endurance Gold is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Carlin Gold and Endurance Gold

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

The idea behind Carlin Gold and Endurance Gold 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.