Correlation Between Endurance Gold and Red Pine

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

By analyzing existing cross correlation between Endurance Gold and Red Pine Exploration, you can compare the effects of market volatilities on Endurance Gold and Red Pine 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 Red Pine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endurance Gold and Red Pine.

Diversification Opportunities for Endurance Gold and Red Pine

0.13

Correlation Coefficient

Endurance Gold  Red Pine

Average diversification

The 3 months correlation between Endurance and Red is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Endurance Gold and Red Pine Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Pine Exploration 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 Red Pine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Pine Exploration has no effect on the direction of Endurance Gold i.e., Endurance Gold and Red Pine go up and down completely randomly.

Pair Corralation between Endurance Gold and Red Pine

Assuming the 90 days horizon Endurance Gold is expected to generate 1.64 times less return on investment than Red Pine. But when comparing it to its historical volatility, Endurance Gold is 1.51 times less risky than Red Pine. It trades about 0.02 of its potential returns per unit of risk. Red Pine Exploration is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  8.71  in Red Pine Exploration on December 29, 2024 and sell it today you would lose (0.21) from holding Red Pine Exploration or give up 2.41% of portfolio value over 90 days.

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

Endurance Gold  vs.  Red Pine Exploration

Endurance Gold

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Endurance Gold are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Endurance Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Red Pine Exploration

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Red Pine Exploration are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Red Pine may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Endurance Gold and Red Pine

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

The idea behind Endurance Gold and Red Pine Exploration 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.