Correlation Between Endeavour Mining and Schroder

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

Diversification Opportunities for Endeavour Mining and Schroder

0.35

Correlation Coefficient

Endeavour Mining  Schroder

Weak diversification

The 3 months correlation between Endeavour and Schroder is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining Corp and Schroder UK Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schroder UK Mid 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 Schroder. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schroder UK Mid has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and Schroder go up and down completely randomly.

Pair Corralation between Endeavour Mining and Schroder

Assuming the 90 days trading horizon Endeavour Mining Corp is expected to generate 2.81 times more return on investment than Schroder. However, Endeavour Mining is 2.81 times more volatile than Schroder UK Mid. It trades about 0.03 of its potential returns per unit of risk. Schroder UK Mid is currently generating about -0.03 per unit of risk. If you would invest  148,046  in Endeavour Mining Corp on September 4, 2024 and sell it today you would earn a total of  4,454  from holding Endeavour Mining Corp or generate 3.01% return on investment over 90 days.

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

Endeavour Mining Corp  vs.  Schroder UK Mid

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.

Schroder UK Mid

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Schroder UK Mid has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Schroder 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 Schroder

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

The idea behind Endeavour Mining Corp and Schroder UK Mid 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.