Correlation Between Endeavour Silver and Provenance Gold

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

Diversification Opportunities for Endeavour Silver and Provenance Gold

-0.59

Correlation Coefficient

Endeavour Silver  Provenance Gold

Excellent diversification

The 3 months correlation between Endeavour and Provenance is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Silver Corp and Provenance Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Provenance 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 Provenance Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Provenance Gold Corp has no effect on the direction of Endeavour Silver i.e., Endeavour Silver and Provenance Gold go up and down completely randomly.

Pair Corralation between Endeavour Silver and Provenance Gold

Considering the 90-day investment horizon Endeavour Silver Corp is expected to under-perform the Provenance Gold. But the stock apears to be less risky and, when comparing its historical volatility, Endeavour Silver Corp is 1.65 times less risky than Provenance Gold. The stock trades about -0.2 of its potential returns per unit of risk. The Provenance Gold Corp is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  23.00  in Provenance Gold Corp on October 11, 2024 and sell it today you would lose (3.00) from holding Provenance Gold Corp or give up 13.04% of portfolio value over 90 days.

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

Endeavour Silver Corp  vs.  Provenance 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.

Provenance Gold Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Provenance Gold Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Provenance Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Endeavour Silver and Provenance Gold

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

The idea behind Endeavour Silver Corp and Provenance 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.