Correlation Between Endeavour Silver and Sonoro Gold

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

Diversification Opportunities for Endeavour Silver and Sonoro Gold

0.68

Correlation Coefficient

Endeavour Silver  Sonoro Gold

Poor diversification

The 3 months correlation between Endeavour and Sonoro is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Silver Corp and Sonoro Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonoro 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 Sonoro Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonoro Gold Corp has no effect on the direction of Endeavour Silver i.e., Endeavour Silver and Sonoro Gold go up and down completely randomly.

Pair Corralation between Endeavour Silver and Sonoro Gold

Considering the 90-day investment horizon Endeavour Silver is expected to generate 3.77 times less return on investment than Sonoro Gold. But when comparing it to its historical volatility, Endeavour Silver Corp is 2.4 times less risky than Sonoro Gold. It trades about 0.11 of its potential returns per unit of risk. Sonoro Gold Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  3.24  in Sonoro Gold Corp on September 12, 2024 and sell it today you would earn a total of  3.71  from holding Sonoro Gold Corp or generate 114.51% return on investment over 90 days.

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

Endeavour Silver Corp  vs.  Sonoro Gold Corp

Endeavour Silver Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Endeavour Silver Corp are ranked lower than 8 (%) 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.

Sonoro Gold Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sonoro Gold Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting technical and fundamental indicators, Sonoro Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Endeavour Silver and Sonoro Gold

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

The idea behind Endeavour Silver Corp and Sonoro 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..