Correlation Between Endurance Gold and Norsemont Mining

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

By analyzing existing cross correlation between Endurance Gold and Norsemont Mining, you can compare the effects of market volatilities on Endurance Gold and Norsemont 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 Endurance Gold with a short position of Norsemont Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endurance Gold and Norsemont Mining.

Diversification Opportunities for Endurance Gold and Norsemont Mining

-0.18

Correlation Coefficient

Endurance Gold  Norsemont Mining

Good diversification

The 3 months correlation between Endurance and Norsemont is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Endurance Gold and Norsemont Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Norsemont Mining and Endurance Gold 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 Endurance Gold are associated (or correlated) with Norsemont Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Norsemont Mining has no effect on the direction of Endurance Gold i.e., Endurance Gold and Norsemont Mining go up and down completely randomly.

Pair Corralation between Endurance Gold and Norsemont Mining

Assuming the 90 days horizon Endurance Gold is expected to generate 0.59 times more return on investment than Norsemont Mining. However, Endurance Gold is 1.7 times less risky than Norsemont Mining. It trades about -0.04 of its potential returns per unit of risk. Norsemont Mining is currently generating about -0.08 per unit of risk. If you would invest  10.00  in Endurance Gold on December 2, 2024 and sell it today you would lose (1.50) from holding Endurance Gold or give up 15.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Endurance Gold  vs.  Norsemont Mining

Endurance Gold

Risk-Adjusted Performance

Very Weak

Over the last 90 days Endurance Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Norsemont Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days Norsemont Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Endurance Gold and Norsemont Mining

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

The idea behind Endurance Gold and Norsemont Mining 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..