Correlation Between NorthWest Healthcare and Endeavour Silver

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

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

Diversification Opportunities for NorthWest Healthcare and Endeavour Silver

-0.22

Correlation Coefficient

NorthWest Healthcare  Endeavour Silver

Very good diversification

The 3 months correlation between NorthWest and Endeavour is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding NorthWest Healthcare Propertie 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 NorthWest Healthcare 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 NorthWest Healthcare Properties 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 NorthWest Healthcare i.e., NorthWest Healthcare and Endeavour Silver go up and down completely randomly.

Pair Corralation between NorthWest Healthcare and Endeavour Silver

Assuming the 90 days trading horizon NorthWest Healthcare Properties is expected to under-perform the Endeavour Silver. But the stock apears to be less risky and, when comparing its historical volatility, NorthWest Healthcare Properties is 2.85 times less risky than Endeavour Silver. The stock trades about -0.11 of its potential returns per unit of risk. The Endeavour Silver Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  473.00  in Endeavour Silver Corp on September 12, 2024 and sell it today you would earn a total of  130.00  from holding Endeavour Silver Corp or generate 27.48% return on investment over 90 days.

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

NorthWest Healthcare Propertie  vs.  Endeavour Silver Corp

NorthWest Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NorthWest Healthcare Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Endeavour Silver Corp

Risk-Adjusted Performance

9 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Endeavour Silver Corp are ranked lower than 9 (%) 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 NorthWest Healthcare and Endeavour Silver

The main advantage of trading using opposite NorthWest Healthcare and Endeavour Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NorthWest Healthcare 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 NorthWest Healthcare Properties 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.