Correlation Between Southern Copper and Endeavour Mining
Can any of the company-specific risk be diversified away by investing in both Southern Copper 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 Southern Copper and Endeavour Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Copper Corp and Endeavour Mining Corp, you can compare the effects of market volatilities on Southern Copper 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 Southern Copper with a short position of Endeavour Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Copper and Endeavour Mining.
Diversification Opportunities for Southern Copper and Endeavour Mining
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Southern and Endeavour is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Southern Copper Corp 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 Southern Copper 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 Southern Copper Corp 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 Southern Copper i.e., Southern Copper and Endeavour Mining go up and down completely randomly.
Pair Corralation between Southern Copper and Endeavour Mining
Assuming the 90 days trading horizon Southern Copper Corp is expected to generate 1.31 times more return on investment than Endeavour Mining. However, Southern Copper is 1.31 times more volatile than Endeavour Mining Corp. It trades about -0.01 of its potential returns per unit of risk. Endeavour Mining Corp is currently generating about -0.13 per unit of risk. If you would invest 10,407 in Southern Copper Corp on September 12, 2024 and sell it today you would lose (72.00) from holding Southern Copper Corp or give up 0.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern Copper Corp vs. Endeavour Mining Corp
Performance |
| Timeline |
| Southern Copper Corp |
| Endeavour Mining Corp |
Southern Copper and Endeavour Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Copper and Endeavour Mining
The main advantage of trading using opposite Southern Copper and Endeavour Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Copper 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.| Southern Copper vs. Prudential Financial | Southern Copper vs. Ecclesiastical Insurance Office | Southern Copper vs. Litigation Capital Management | Southern Copper vs. OneSavings Bank PLC |
| Endeavour Mining vs. Givaudan SA | Endeavour Mining vs. Antofagasta PLC | Endeavour Mining vs. Ferrexpo PLC | Endeavour Mining vs. Atalaya Mining |
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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