Correlation Between Endeavour Silver and Platinum Group

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

Diversification Opportunities for Endeavour Silver and Platinum Group

0.1

Correlation Coefficient

Endeavour Silver  Platinum Group

Average diversification

The 3 months correlation between Endeavour and Platinum is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Silver Corp and Platinum Group Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Group Metals 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 Platinum Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Group Metals has no effect on the direction of Endeavour Silver i.e., Endeavour Silver and Platinum Group go up and down completely randomly.

Pair Corralation between Endeavour Silver and Platinum Group

Considering the 90-day investment horizon Endeavour Silver Corp is expected to generate 1.29 times more return on investment than Platinum Group. However, Endeavour Silver is 1.29 times more volatile than Platinum Group Metals. It trades about 0.09 of its potential returns per unit of risk. Platinum Group Metals is currently generating about -0.01 per unit of risk. If you would invest  356.00  in Endeavour Silver Corp on December 30, 2024 and sell it today you would earn a total of  77.00  from holding Endeavour Silver Corp or generate 21.63% return on investment over 90 days.

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

Endeavour Silver Corp  vs.  Platinum Group Metals

Endeavour Silver Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Endeavour Silver Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Endeavour Silver disclosed solid returns over the last few months and may actually be approaching a breakup point.

Platinum Group Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Platinum Group Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Platinum Group is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Endeavour Silver and Platinum Group

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

The idea behind Endeavour Silver Corp and Platinum Group Metals 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.