Correlation Between Endeavour Mining and Barrick Gold

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

Diversification Opportunities for Endeavour Mining and Barrick Gold

0.96
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Endeavour and Barrick is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining Corp and Barrick Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrick Gold Corp 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 Barrick Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrick Gold Corp has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and Barrick Gold go up and down completely randomly.

Pair Corralation between Endeavour Mining and Barrick Gold

Assuming the 90 days trading horizon Endeavour Mining Corp is expected to under-perform the Barrick Gold. In addition to that, Endeavour Mining is 1.24 times more volatile than Barrick Gold Corp. It trades about -0.01 of its total potential returns per unit of risk. Barrick Gold Corp is currently generating about 0.01 per unit of volatility. If you would invest  2,254  in Barrick Gold Corp on September 30, 2024 and sell it today you would earn a total of  6.00  from holding Barrick Gold Corp or generate 0.27% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Endeavour Mining Corp  vs.  Barrick Gold Corp

 Performance 
       Timeline  
Endeavour Mining Corp 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Endeavour Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
Barrick Gold Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Barrick Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Endeavour Mining and Barrick Gold Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Endeavour Mining and Barrick Gold

The main advantage of trading using opposite Endeavour Mining and Barrick Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endeavour Mining position performs unexpectedly, Barrick Gold 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 Barrick Gold will offset losses from the drop in Barrick Gold's long position.
The idea behind Endeavour Mining Corp and Barrick Gold Corp 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

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