Correlation Between Stillwater Critical and Endeavour Silver

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

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

Diversification Opportunities for Stillwater Critical and Endeavour Silver

0.23

Correlation Coefficient

Stillwater Critical  Endeavour Silver

Modest diversification

The 3 months correlation between Stillwater and Endeavour is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Stillwater Critical Minerals 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 Stillwater Critical 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 Stillwater Critical Minerals 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 Stillwater Critical i.e., Stillwater Critical and Endeavour Silver go up and down completely randomly.

Pair Corralation between Stillwater Critical and Endeavour Silver

Assuming the 90 days horizon Stillwater Critical Minerals is expected to generate 1.3 times more return on investment than Endeavour Silver. However, Stillwater Critical is 1.3 times more volatile than Endeavour Silver Corp. It trades about 0.0 of its potential returns per unit of risk. Endeavour Silver Corp is currently generating about 0.0 per unit of risk. If you would invest  14.00  in Stillwater Critical Minerals on December 8, 2024 and sell it today you would lose (1.00) from holding Stillwater Critical Minerals or give up 7.14% of portfolio value over 90 days.

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

Stillwater Critical Minerals  vs.  Endeavour Silver Corp

Stillwater Critical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stillwater Critical Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Stillwater Critical is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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. In spite of very healthy basic indicators, Endeavour Silver is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Stillwater Critical and Endeavour Silver

The main advantage of trading using opposite Stillwater Critical and Endeavour Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stillwater Critical 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 Stillwater Critical Minerals 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.