Correlation Between Alliance Data and Endeavour Mining
Can any of the company-specific risk be diversified away by investing in both Alliance Data 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 Alliance Data and Endeavour Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliance Data Systems and Endeavour Mining Corp, you can compare the effects of market volatilities on Alliance Data 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 Alliance Data with a short position of Endeavour Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliance Data and Endeavour Mining.
Diversification Opportunities for Alliance Data and Endeavour Mining
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alliance and Endeavour is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Alliance Data Systems 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 Alliance Data 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 Alliance Data Systems 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 Alliance Data i.e., Alliance Data and Endeavour Mining go up and down completely randomly.
Pair Corralation between Alliance Data and Endeavour Mining
Assuming the 90 days trading horizon Alliance Data is expected to generate 1.37 times less return on investment than Endeavour Mining. In addition to that, Alliance Data is 1.22 times more volatile than Endeavour Mining Corp. It trades about 0.15 of its total potential returns per unit of risk. Endeavour Mining Corp is currently generating about 0.24 per unit of volatility. If you would invest 149,500 in Endeavour Mining Corp on November 2, 2024 and sell it today you would earn a total of 15,700 from holding Endeavour Mining Corp or generate 10.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
Alliance Data Systems vs. Endeavour Mining Corp
Performance |
| Timeline |
| Alliance Data Systems |
| Endeavour Mining Corp |
Alliance Data and Endeavour Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliance Data and Endeavour Mining
The main advantage of trading using opposite Alliance Data and Endeavour Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliance Data 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.| Alliance Data vs. Silvercorp Metals | Alliance Data vs. Berner Kantonalbank AG | Alliance Data vs. Games Workshop Group | Alliance Data vs. Gaming Realms plc |
| Endeavour Mining vs. Gear4music Plc | Endeavour Mining vs. Zoom Video Communications | Endeavour Mining vs. Intermediate Capital Group | Endeavour Mining vs. Zinc Media Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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