Correlation Between Global X and Endeavour Silver

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

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

Diversification Opportunities for Global X and Endeavour Silver

0.2

Correlation Coefficient

Global X  Endeavour Silver

Modest diversification

The 3 months correlation between Global and Endeavour is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Global X Active and Endeavour Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endeavour Silver Corp and Global X 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 Global X Active are associated (or correlated) with Endeavour Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endeavour Silver Corp has no effect on the direction of Global X i.e., Global X and Endeavour Silver go up and down completely randomly.

Pair Corralation between Global X and Endeavour Silver

Assuming the 90 days trading horizon Global X Active is expected to generate 0.14 times more return on investment than Endeavour Silver. However, Global X Active is 7.0 times less risky than Endeavour Silver. It trades about 0.14 of its potential returns per unit of risk. Endeavour Silver Corp is currently generating about -0.31 per unit of risk. If you would invest  927.00  in Global X Active on August 31, 2024 and sell it today you would earn a total of  13.00  from holding Global X Active or generate 1.4% return on investment over 90 days.

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

Global X Active  vs.  Endeavour Silver Corp

Global X Active

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Active are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Global X is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Endeavour Silver Corp

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Endeavour Silver Corp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Endeavour Silver displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global X and Endeavour Silver

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

The idea behind Global X Active and Endeavour Silver 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.

Check out your portfolio center.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.