Correlation Between Endeavour Silver and Silver Mines

Can any of the company-specific risk be diversified away by investing in both Endeavour Silver and Silver Mines 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 Silver and Silver Mines into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Endeavour Silver Corp and Silver Mines Limited, you can compare the effects of market volatilities on Endeavour Silver and Silver Mines 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 Silver with a short position of Silver Mines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavour Silver and Silver Mines.

Diversification Opportunities for Endeavour Silver and Silver Mines

0.62

Correlation Coefficient

Endeavour Silver  Silver Mines

Poor diversification

The 3 months correlation between Endeavour and Silver is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Silver Corp and Silver Mines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Mines Limited and Endeavour Silver 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 Silver Corp are associated (or correlated) with Silver Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Mines Limited has no effect on the direction of Endeavour Silver i.e., Endeavour Silver and Silver Mines go up and down completely randomly.

Pair Corralation between Endeavour Silver and Silver Mines

Assuming the 90 days horizon Endeavour Silver Corp is expected to generate 0.64 times more return on investment than Silver Mines. However, Endeavour Silver Corp is 1.55 times less risky than Silver Mines. It trades about 0.08 of its potential returns per unit of risk. Silver Mines Limited is currently generating about 0.05 per unit of risk. If you would invest  360.00  in Endeavour Silver Corp on December 23, 2024 and sell it today you would earn a total of  74.00  from holding Endeavour Silver Corp or generate 20.56% return on investment over 90 days.

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

Endeavour Silver Corp  vs.  Silver Mines Limited

Endeavour Silver Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Endeavour Silver Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Endeavour Silver reported solid returns over the last few months and may actually be approaching a breakup point.

Silver Mines Limited

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Silver Mines Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Silver Mines reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Endeavour Silver and Silver Mines

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

The idea behind Endeavour Silver Corp and Silver Mines Limited 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.