Correlation Between Enduro Metals and INTEL CDR

Can any of the company-specific risk be diversified away by investing in both Enduro Metals and INTEL CDR 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 INTEL CDR 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 INTEL CDR, you can compare the effects of market volatilities on Enduro Metals and INTEL CDR 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 INTEL CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enduro Metals and INTEL CDR.

Diversification Opportunities for Enduro Metals and INTEL CDR

0.26

Correlation Coefficient

Enduro Metals  INTEL CDR

Modest diversification

The 3 months correlation between Enduro and INTEL is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Enduro Metals Corp and INTEL CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTEL CDR 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 INTEL CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTEL CDR has no effect on the direction of Enduro Metals i.e., Enduro Metals and INTEL CDR go up and down completely randomly.

Pair Corralation between Enduro Metals and INTEL CDR

Assuming the 90 days trading horizon Enduro Metals Corp is expected to generate 1.33 times more return on investment than INTEL CDR. However, Enduro Metals is 1.33 times more volatile than INTEL CDR. It trades about -0.01 of its potential returns per unit of risk. INTEL CDR is currently generating about -0.06 per unit of risk. If you would invest  22.00  in Enduro Metals Corp on October 22, 2024 and sell it today you would lose (5.00) from holding Enduro Metals Corp or give up 22.73% of portfolio value over 90 days.

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

Enduro Metals Corp  vs.  INTEL CDR

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.

INTEL CDR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTEL CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, INTEL CDR is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Enduro Metals and INTEL CDR

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

The idea behind Enduro Metals Corp and INTEL CDR 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.