Correlation Between Emera Srs and Endeavour Silver

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

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

Diversification Opportunities for Emera Srs and Endeavour Silver

-0.61

Correlation Coefficient

Emera Srs  Endeavour Silver

Excellent diversification

The 3 months correlation between Emera and Endeavour is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Emera Srs C and Endeavour Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endeavour Silver Corp and Emera Srs 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 Emera Srs C are associated (or correlated) with Endeavour Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endeavour Silver Corp has no effect on the direction of Emera Srs i.e., Emera Srs and Endeavour Silver go up and down completely randomly.

Pair Corralation between Emera Srs and Endeavour Silver

Assuming the 90 days trading horizon Emera Srs C is expected to generate 0.16 times more return on investment than Endeavour Silver. However, Emera Srs C is 6.3 times less risky than Endeavour Silver. It trades about 0.12 of its potential returns per unit of risk. Endeavour Silver Corp is currently generating about -0.05 per unit of risk. If you would invest  2,276  in Emera Srs C on October 12, 2024 and sell it today you would earn a total of  107.00  from holding Emera Srs C or generate 4.7% return on investment over 90 days.

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

Emera Srs C  vs.  Endeavour Silver Corp

Emera Srs C

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Emera Srs C are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Emera Srs is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Endeavour Silver Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Endeavour Silver Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Emera Srs and Endeavour Silver

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

The idea behind Emera Srs C and Endeavour Silver 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.