Correlation Between Endeavour Silver and Pentagon I

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

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

Diversification Opportunities for Endeavour Silver and Pentagon I

0.29

Correlation Coefficient

Endeavour Silver  Pentagon I

Modest diversification

The 3 months correlation between Endeavour and Pentagon is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Silver Corp and Pentagon I Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pentagon I Capital and Endeavour Silver 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 Endeavour Silver Corp are associated (or correlated) with Pentagon I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pentagon I Capital has no effect on the direction of Endeavour Silver i.e., Endeavour Silver and Pentagon I go up and down completely randomly.

Pair Corralation between Endeavour Silver and Pentagon I

Assuming the 90 days trading horizon Endeavour Silver Corp is expected to generate 0.48 times more return on investment than Pentagon I. However, Endeavour Silver Corp is 2.1 times less risky than Pentagon I. It trades about 0.05 of its potential returns per unit of risk. Pentagon I Capital is currently generating about -0.1 per unit of risk. If you would invest  489.00  in Endeavour Silver Corp on September 22, 2024 and sell it today you would earn a total of  43.00  from holding Endeavour Silver Corp or generate 8.79% return on investment over 90 days.

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

Endeavour Silver Corp  vs.  Pentagon I Capital

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 weak basic indicators, Endeavour Silver displayed solid returns over the last few months and may actually be approaching a breakup point.

Pentagon I Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pentagon I Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Endeavour Silver and Pentagon I

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

The idea behind Endeavour Silver Corp and Pentagon I Capital 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.