Correlation Between Endeavour Silver and Chesapeake Gold

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

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

Diversification Opportunities for Endeavour Silver and Chesapeake Gold

0.81

Correlation Coefficient

Endeavour Silver  Chesapeake Gold

Very poor diversification

The 3 months correlation between Endeavour and Chesapeake is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Silver Corp and Chesapeake Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Gold Corp and Endeavour Silver 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 Endeavour Silver Corp are associated (or correlated) with Chesapeake Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Gold Corp has no effect on the direction of Endeavour Silver i.e., Endeavour Silver and Chesapeake Gold go up and down completely randomly.

Pair Corralation between Endeavour Silver and Chesapeake Gold

Considering the 90-day investment horizon Endeavour Silver Corp is expected to generate 0.77 times more return on investment than Chesapeake Gold. However, Endeavour Silver Corp is 1.3 times less risky than Chesapeake Gold. It trades about 0.02 of its potential returns per unit of risk. Chesapeake Gold Corp is currently generating about 0.0 per unit of risk. If you would invest  357.00  in Endeavour Silver Corp on October 11, 2024 and sell it today you would lose (4.00) from holding Endeavour Silver Corp or give up 1.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.8%
Values	Daily Returns

Endeavour Silver Corp  vs.  Chesapeake Gold Corp

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. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Chesapeake Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chesapeake Gold Corp 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 technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Endeavour Silver and Chesapeake Gold

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

The idea behind Endeavour Silver Corp and Chesapeake Gold 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.