Correlation Between Seraphim Space and Endeavour Mining

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

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

Diversification Opportunities for Seraphim Space and Endeavour Mining

-0.4

Correlation Coefficient

Seraphim Space  Endeavour Mining

Very good diversification

The 3 months correlation between Seraphim and Endeavour is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Seraphim Space Investment and Endeavour Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endeavour Mining Corp and Seraphim Space 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 Seraphim Space Investment are associated (or correlated) with Endeavour Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endeavour Mining Corp has no effect on the direction of Seraphim Space i.e., Seraphim Space and Endeavour Mining go up and down completely randomly.

Pair Corralation between Seraphim Space and Endeavour Mining

Assuming the 90 days trading horizon Seraphim Space Investment is expected to under-perform the Endeavour Mining. But the stock apears to be less risky and, when comparing its historical volatility, Seraphim Space Investment is 1.17 times less risky than Endeavour Mining. The stock trades about 0.0 of its potential returns per unit of risk. The Endeavour Mining Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  154,900  in Endeavour Mining Corp on November 28, 2024 and sell it today you would earn a total of  7,000  from holding Endeavour Mining Corp or generate 4.52% return on investment over 90 days.

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

Seraphim Space Investment  vs.  Endeavour Mining Corp

Seraphim Space Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Seraphim Space Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Seraphim Space is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Endeavour Mining Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Endeavour Mining Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Endeavour Mining is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Seraphim Space and Endeavour Mining

The main advantage of trading using opposite Seraphim Space and Endeavour Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seraphim Space position performs unexpectedly, Endeavour Mining 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 Mining will offset losses from the drop in Endeavour Mining's long position.

The idea behind Seraphim Space Investment and Endeavour Mining 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.