Correlation Between Cariboo Rose and Endurance Gold

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

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

Diversification Opportunities for Cariboo Rose and Endurance Gold

0.13

Correlation Coefficient

Cariboo Rose  Endurance Gold

Average diversification

The 3 months correlation between Cariboo and Endurance is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Cariboo Rose Resources 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 Cariboo Rose 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 Cariboo Rose Resources 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 Cariboo Rose i.e., Cariboo Rose and Endurance Gold go up and down completely randomly.

Pair Corralation between Cariboo Rose and Endurance Gold

Assuming the 90 days horizon Cariboo Rose Resources is expected to generate 2.18 times more return on investment than Endurance Gold. However, Cariboo Rose is 2.18 times more volatile than Endurance Gold Corp. It trades about 0.08 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  4.00  in Cariboo Rose Resources on December 30, 2024 and sell it today you would earn a total of  1.00  from holding Cariboo Rose Resources or generate 25.0% return on investment over 90 days.

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

Cariboo Rose Resources  vs.  Endurance Gold Corp

Cariboo Rose Resources

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Cariboo Rose Resources are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Cariboo Rose 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 Cariboo Rose and Endurance Gold

The main advantage of trading using opposite Cariboo Rose and Endurance Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cariboo Rose 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 Cariboo Rose Resources 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.