Correlation Between Guru Organic and Enduro Metals

Can any of the company-specific risk be diversified away by investing in both Guru Organic and Enduro Metals 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 Guru Organic and Enduro Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Guru Organic Energy and Enduro Metals Corp, you can compare the effects of market volatilities on Guru Organic and Enduro Metals 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 Guru Organic with a short position of Enduro Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guru Organic and Enduro Metals.

Diversification Opportunities for Guru Organic and Enduro Metals

-0.36

Correlation Coefficient

Guru Organic  Enduro Metals

Very good diversification

The 3 months correlation between Guru and Enduro is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Guru Organic Energy and Enduro Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enduro Metals Corp and Guru Organic 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 Guru Organic Energy are associated (or correlated) with Enduro Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enduro Metals Corp has no effect on the direction of Guru Organic i.e., Guru Organic and Enduro Metals go up and down completely randomly.

Pair Corralation between Guru Organic and Enduro Metals

Assuming the 90 days trading horizon Guru Organic Energy is expected to generate 0.77 times more return on investment than Enduro Metals. However, Guru Organic Energy is 1.31 times less risky than Enduro Metals. It trades about 0.12 of its potential returns per unit of risk. Enduro Metals Corp is currently generating about 0.03 per unit of risk. If you would invest  137.00  in Guru Organic Energy on December 29, 2024 and sell it today you would earn a total of  44.00  from holding Guru Organic Energy or generate 32.12% return on investment over 90 days.

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

Guru Organic Energy  vs.  Enduro Metals Corp

Guru Organic Energy

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guru Organic Energy are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Guru Organic displayed solid returns over the last few months and may actually be approaching a breakup point.

Enduro Metals Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enduro Metals Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal fundamental indicators, Enduro Metals may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Guru Organic and Enduro Metals

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

The idea behind Guru Organic Energy and Enduro Metals 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.