Correlation Between Endeavour Mining and Advanced Medical

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

Diversification Opportunities for Endeavour Mining and Advanced Medical

0.43

Correlation Coefficient

Endeavour Mining  Advanced Medical

Very weak diversification

The 3 months correlation between Endeavour and Advanced is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining Corp and Advanced Medical Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Medical Sol 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 Advanced Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Medical Sol has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and Advanced Medical go up and down completely randomly.

Pair Corralation between Endeavour Mining and Advanced Medical

Assuming the 90 days trading horizon Endeavour Mining Corp is expected to generate 0.8 times more return on investment than Advanced Medical. However, Endeavour Mining Corp is 1.26 times less risky than Advanced Medical. It trades about 0.17 of its potential returns per unit of risk. Advanced Medical Solutions is currently generating about 0.01 per unit of risk. If you would invest  141,600  in Endeavour Mining Corp on December 25, 2024 and sell it today you would earn a total of  33,200  from holding Endeavour Mining Corp or generate 23.45% return on investment over 90 days.

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

Endeavour Mining Corp  vs.  Advanced Medical Solutions

Endeavour Mining Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Endeavour Mining Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Endeavour Mining exhibited solid returns over the last few months and may actually be approaching a breakup point.

Advanced Medical Sol

Risk-Adjusted Performance

Very Weak

Over the last 90 days Advanced Medical Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Advanced Medical is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Endeavour Mining and Advanced Medical

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

The idea behind Endeavour Mining Corp and Advanced Medical Solutions 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.