Correlation Between Ivanhoe Electric and Endeavour Silver

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

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

Diversification Opportunities for Ivanhoe Electric and Endeavour Silver

0.58

Correlation Coefficient

Ivanhoe Electric  Endeavour Silver

Very weak diversification

The 3 months correlation between Ivanhoe and Endeavour is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Ivanhoe Electric 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 Ivanhoe Electric 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 Ivanhoe Electric 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 Ivanhoe Electric i.e., Ivanhoe Electric and Endeavour Silver go up and down completely randomly.

Pair Corralation between Ivanhoe Electric and Endeavour Silver

Allowing for the 90-day total investment horizon Ivanhoe Electric is expected to under-perform the Endeavour Silver. But the stock apears to be less risky and, when comparing its historical volatility, Ivanhoe Electric is 1.11 times less risky than Endeavour Silver. The stock trades about -0.22 of its potential returns per unit of risk. The Endeavour Silver Corp is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  421.00  in Endeavour Silver Corp on November 28, 2024 and sell it today you would lose (53.00) from holding Endeavour Silver Corp or give up 12.59% of portfolio value over 90 days.

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

Ivanhoe Electric  vs.  Endeavour Silver Corp

Ivanhoe Electric

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ivanhoe Electric has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Endeavour Silver Corp

Risk-Adjusted Performance

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 latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Ivanhoe Electric and Endeavour Silver

The main advantage of trading using opposite Ivanhoe Electric and Endeavour Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivanhoe Electric 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 Ivanhoe Electric 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.

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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.