Correlation Between Endeavour Mining and Alfa Financial

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

Diversification Opportunities for Endeavour Mining and Alfa Financial

0.67

Correlation Coefficient

Endeavour Mining  Alfa Financial

Poor diversification

The 3 months correlation between Endeavour and Alfa is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining Corp and Alfa Financial Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Financial Software 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 Alfa Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Financial Software has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and Alfa Financial go up and down completely randomly.

Pair Corralation between Endeavour Mining and Alfa Financial

Assuming the 90 days trading horizon Endeavour Mining Corp is expected to under-perform the Alfa Financial. In addition to that, Endeavour Mining is 1.94 times more volatile than Alfa Financial Software. It trades about -0.17 of its total potential returns per unit of risk. Alfa Financial Software is currently generating about -0.06 per unit of volatility. If you would invest  23,300  in Alfa Financial Software on December 10, 2024 and sell it today you would lose (450.00) from holding Alfa Financial Software or give up 1.93% of portfolio value over 90 days.

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

Endeavour Mining Corp  vs.  Alfa Financial Software

Endeavour Mining Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Endeavour Mining Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Endeavour Mining may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Alfa Financial Software

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alfa Financial Software are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Alfa Financial is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Endeavour Mining and Alfa Financial

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

The idea behind Endeavour Mining Corp and Alfa Financial Software 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 CEOs Directory module to screen CEOs from public companies around the world.