Correlation Between Medical Facilities and Endeavour Silver

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

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

Diversification Opportunities for Medical Facilities and Endeavour Silver

0.15

Correlation Coefficient

Medical Facilities  Endeavour Silver

Average diversification

The 3 months correlation between Medical and Endeavour is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Medical Facilities and Endeavour Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endeavour Silver Corp and Medical Facilities 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 Medical Facilities are associated (or correlated) with Endeavour Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endeavour Silver Corp has no effect on the direction of Medical Facilities i.e., Medical Facilities and Endeavour Silver go up and down completely randomly.

Pair Corralation between Medical Facilities and Endeavour Silver

Assuming the 90 days horizon Medical Facilities is expected to generate 0.43 times more return on investment than Endeavour Silver. However, Medical Facilities is 2.34 times less risky than Endeavour Silver. It trades about -0.04 of its potential returns per unit of risk. Endeavour Silver Corp is currently generating about -0.2 per unit of risk. If you would invest  1,587  in Medical Facilities on September 23, 2024 and sell it today you would lose (25.00) from holding Medical Facilities or give up 1.58% of portfolio value over 90 days.

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

Medical Facilities  vs.  Endeavour Silver Corp

Medical Facilities

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Medical Facilities are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Medical Facilities may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Endeavour Silver Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Endeavour Silver Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Endeavour Silver displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Medical Facilities and Endeavour Silver

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

The idea behind Medical Facilities and Endeavour Silver 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.