Correlation Between XLMedia PLC and Endeavour Mining

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

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

Diversification Opportunities for XLMedia PLC and Endeavour Mining

-0.31

Correlation Coefficient

XLMedia PLC  Endeavour Mining

Very good diversification

The 3 months correlation between XLMedia and Endeavour is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding XLMedia PLC 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 XLMedia PLC 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 XLMedia PLC 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 XLMedia PLC i.e., XLMedia PLC and Endeavour Mining go up and down completely randomly.

Pair Corralation between XLMedia PLC and Endeavour Mining

Assuming the 90 days trading horizon XLMedia PLC is expected to generate 1.52 times more return on investment than Endeavour Mining. However, XLMedia PLC is 1.52 times more volatile than Endeavour Mining Corp. It trades about 0.09 of its potential returns per unit of risk. Endeavour Mining Corp is currently generating about 0.03 per unit of risk. If you would invest  1,000.00  in XLMedia PLC on September 3, 2024 and sell it today you would earn a total of  190.00  from holding XLMedia PLC or generate 19.0% return on investment over 90 days.

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

XLMedia PLC  vs.  Endeavour Mining Corp

XLMedia PLC

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in XLMedia PLC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, XLMedia PLC exhibited solid returns over the last few months and may actually be approaching a breakup point.

Endeavour Mining Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Endeavour Mining Corp are ranked lower than 2 (%) 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 XLMedia PLC and Endeavour Mining

The main advantage of trading using opposite XLMedia PLC and Endeavour Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XLMedia PLC 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 XLMedia PLC 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..