Correlation Between Platinum Group and Endeavour Silver

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

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

Diversification Opportunities for Platinum Group and Endeavour Silver

0.8

Correlation Coefficient

Platinum Group  Endeavour Silver

Very poor diversification

The 3 months correlation between Platinum and Endeavour is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Group Metals 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 Platinum Group 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 Platinum Group Metals 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 Platinum Group i.e., Platinum Group and Endeavour Silver go up and down completely randomly.

Pair Corralation between Platinum Group and Endeavour Silver

Considering the 90-day investment horizon Platinum Group is expected to generate 2.44 times less return on investment than Endeavour Silver. In addition to that, Platinum Group is 1.1 times more volatile than Endeavour Silver Corp. It trades about 0.04 of its total potential returns per unit of risk. Endeavour Silver Corp is currently generating about 0.1 per unit of volatility. If you would invest  343.00  in Endeavour Silver Corp on November 28, 2024 and sell it today you would earn a total of  25.00  from holding Endeavour Silver Corp or generate 7.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.45%
Values	Daily Returns

Platinum Group Metals  vs.  Endeavour Silver Corp

Platinum Group Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Platinum Group Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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 Platinum Group and Endeavour Silver

The main advantage of trading using opposite Platinum Group and Endeavour Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Group 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 Platinum Group Metals 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.