Correlation Between STMicroelectronics and Endeavour Mining
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics 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 STMicroelectronics and Endeavour Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMicroelectronics NV and Endeavour Mining Corp, you can compare the effects of market volatilities on STMicroelectronics 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 STMicroelectronics with a short position of Endeavour Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and Endeavour Mining.
Diversification Opportunities for STMicroelectronics and Endeavour Mining
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between STMicroelectronics and Endeavour is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV 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 STMicroelectronics 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 STMicroelectronics NV 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 STMicroelectronics i.e., STMicroelectronics and Endeavour Mining go up and down completely randomly.
Pair Corralation between STMicroelectronics and Endeavour Mining
Assuming the 90 days trading horizon STMicroelectronics NV is expected to under-perform the Endeavour Mining. In addition to that, STMicroelectronics is 1.02 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 0.0 per unit of volatility. If you would invest 162,178 in Endeavour Mining Corp on September 3, 2024 and sell it today you would lose (7,778) from holding Endeavour Mining Corp or give up 4.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STMicroelectronics NV vs. Endeavour Mining Corp
Performance |
| Timeline |
| STMicroelectronics |
| Endeavour Mining Corp |
STMicroelectronics and Endeavour Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and Endeavour Mining
The main advantage of trading using opposite STMicroelectronics and Endeavour Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics 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.| STMicroelectronics vs. Deltex Medical Group | STMicroelectronics vs. Fevertree Drinks Plc | STMicroelectronics vs. Associated British Foods | STMicroelectronics vs. Medical Properties Trust |
| Endeavour Mining vs. Greenroc Mining PLC | Endeavour Mining vs. Zurich Insurance Group | Endeavour Mining vs. Lundin Mining Corp | Endeavour Mining vs. Central Asia Metals |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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