Correlation Between Endeavour Mining and Metalero Mining

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

Diversification Opportunities for Endeavour Mining and Metalero Mining

-0.1

Correlation Coefficient

Endeavour Mining  Metalero Mining

Good diversification

The 3 months correlation between Endeavour and Metalero is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining Corp and Metalero Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalero Mining 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 Metalero Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metalero Mining Corp has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and Metalero Mining go up and down completely randomly.

Pair Corralation between Endeavour Mining and Metalero Mining

Assuming the 90 days trading horizon Endeavour Mining Corp is expected to generate 0.27 times more return on investment than Metalero Mining. However, Endeavour Mining Corp is 3.66 times less risky than Metalero Mining. It trades about 0.25 of its potential returns per unit of risk. Metalero Mining Corp is currently generating about 0.05 per unit of risk. If you would invest  2,511  in Endeavour Mining Corp on December 30, 2024 and sell it today you would earn a total of  882.00  from holding Endeavour Mining Corp or generate 35.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Endeavour Mining Corp  vs.  Metalero Mining Corp

Endeavour Mining Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Endeavour Mining Corp are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Endeavour Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Metalero Mining Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Metalero Mining Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Metalero Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Endeavour Mining and Metalero Mining

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

The idea behind Endeavour Mining Corp and Metalero Mining 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.