Correlation Between Endeavour Mining and Endo International

Can any of the company-specific risk be diversified away by investing in both Endeavour Mining and Endo International 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 Endo International 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 Endo International PLC, you can compare the effects of market volatilities on Endeavour Mining and Endo International 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 Endo International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavour Mining and Endo International.

Diversification Opportunities for Endeavour Mining and Endo International

0.79

Correlation Coefficient

Endeavour Mining  Endo International

Poor diversification

The 3 months correlation between Endeavour and Endo is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining Corp and Endo International PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endo International PLC 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 Endo International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endo International PLC has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and Endo International go up and down completely randomly.

Pair Corralation between Endeavour Mining and Endo International

Assuming the 90 days trading horizon Endeavour Mining is expected to generate 2.79 times less return on investment than Endo International. In addition to that, Endeavour Mining is 2.48 times more volatile than Endo International PLC. It trades about 0.02 of its total potential returns per unit of risk. Endo International PLC is currently generating about 0.14 per unit of volatility. If you would invest  62,911  in Endo International PLC on December 2, 2024 and sell it today you would earn a total of  4,784  from holding Endo International PLC or generate 7.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.83%
Values	Daily Returns

Endeavour Mining Corp  vs.  Endo International PLC

Endeavour Mining Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Endeavour Mining Corp are ranked lower than 1 (%) 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.

Endo International PLC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Endo International PLC are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Endo International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Endeavour Mining and Endo International

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

The idea behind Endeavour Mining Corp and Endo International PLC 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..