Correlation Between Signature Resources and Endeavour Silver

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

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

Diversification Opportunities for Signature Resources and Endeavour Silver

0.59

Correlation Coefficient

Signature Resources  Endeavour Silver

Very weak diversification

The 3 months correlation between Signature and Endeavour is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Signature Resources 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 Signature Resources 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 Signature Resources 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 Signature Resources i.e., Signature Resources and Endeavour Silver go up and down completely randomly.

Pair Corralation between Signature Resources and Endeavour Silver

Assuming the 90 days horizon Signature Resources is expected to generate 3.19 times more return on investment than Endeavour Silver. However, Signature Resources is 3.19 times more volatile than Endeavour Silver Corp. It trades about 0.12 of its potential returns per unit of risk. Endeavour Silver Corp is currently generating about 0.09 per unit of risk. If you would invest  3.00  in Signature Resources on December 22, 2024 and sell it today you would earn a total of  2.50  from holding Signature Resources or generate 83.33% return on investment over 90 days.

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

Signature Resources  vs.  Endeavour Silver Corp

Signature Resources

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Signature Resources are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Signature Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Endeavour Silver Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Endeavour Silver Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Endeavour Silver displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Signature Resources and Endeavour Silver

The main advantage of trading using opposite Signature Resources and Endeavour Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Signature Resources 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 Signature Resources 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.