Correlation Between Endeavour Mining and United Parcel

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

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

Diversification Opportunities for Endeavour Mining and United Parcel

0.08

Correlation Coefficient

Endeavour Mining  United Parcel

Significant diversification

The 3 months correlation between Endeavour and United is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining Corp and United Parcel Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Parcel Service and Endeavour Mining 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 Mining Corp are associated (or correlated) with United Parcel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Parcel Service has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and United Parcel go up and down completely randomly.

Pair Corralation between Endeavour Mining and United Parcel

Assuming the 90 days trading horizon Endeavour Mining is expected to generate 1.55 times less return on investment than United Parcel. In addition to that, Endeavour Mining is 1.87 times more volatile than United Parcel Service. It trades about 0.03 of its total potential returns per unit of risk. United Parcel Service is currently generating about 0.09 per unit of volatility. If you would invest  12,651  in United Parcel Service on September 3, 2024 and sell it today you would earn a total of  929.00  from holding United Parcel Service or generate 7.34% return on investment over 90 days.

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

Endeavour Mining Corp  vs.  United Parcel Service

Endeavour Mining Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Endeavour Mining Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Endeavour Mining is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

United Parcel Service

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in United Parcel Service are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, United Parcel may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Endeavour Mining and United Parcel

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

The idea behind Endeavour Mining Corp and United Parcel Service 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.