Correlation Between Enduro Metals and Enbridge Cumulative

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

By analyzing existing cross correlation between Enduro Metals Corp and Enbridge Cumulative Red, you can compare the effects of market volatilities on Enduro Metals and Enbridge Cumulative 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 Enduro Metals with a short position of Enbridge Cumulative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enduro Metals and Enbridge Cumulative.

Diversification Opportunities for Enduro Metals and Enbridge Cumulative

-0.54

Correlation Coefficient

Enduro Metals  Enbridge Cumulative

Excellent diversification

The 3 months correlation between Enduro and Enbridge is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Enduro Metals Corp and Enbridge Cumulative Red in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge Cumulative Red and Enduro Metals 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 Enduro Metals Corp are associated (or correlated) with Enbridge Cumulative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge Cumulative Red has no effect on the direction of Enduro Metals i.e., Enduro Metals and Enbridge Cumulative go up and down completely randomly.

Pair Corralation between Enduro Metals and Enbridge Cumulative

Assuming the 90 days trading horizon Enduro Metals Corp is expected to under-perform the Enbridge Cumulative. In addition to that, Enduro Metals is 17.15 times more volatile than Enbridge Cumulative Red. It trades about -0.1 of its total potential returns per unit of risk. Enbridge Cumulative Red is currently generating about 0.51 per unit of volatility. If you would invest  1,857  in Enbridge Cumulative Red on October 27, 2024 and sell it today you would earn a total of  74.00  from holding Enbridge Cumulative Red or generate 3.98% return on investment over 90 days.

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

Enduro Metals Corp  vs.  Enbridge Cumulative Red

Enduro Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enduro Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's fundamental indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Enbridge Cumulative Red

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Enbridge Cumulative Red are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Enbridge Cumulative may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Enduro Metals and Enbridge Cumulative

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

The idea behind Enduro Metals Corp and Enbridge Cumulative Red 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.