Correlation Between Target Corp and Endeavour Mining
Can any of the company-specific risk be diversified away by investing in both Target Corp 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 Target Corp and Endeavour Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Target Corp and Endeavour Mining Corp, you can compare the effects of market volatilities on Target Corp 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 Target Corp with a short position of Endeavour Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Target Corp and Endeavour Mining.
Diversification Opportunities for Target Corp and Endeavour Mining
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Target and Endeavour is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Target 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 Target Corp 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 Target 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 Target Corp i.e., Target Corp and Endeavour Mining go up and down completely randomly.
Pair Corralation between Target Corp and Endeavour Mining
Assuming the 90 days trading horizon Target Corp is expected to under-perform the Endeavour Mining. In addition to that, Target Corp is 2.37 times more volatile than Endeavour Mining Corp. It trades about -0.1 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 170,900 in Endeavour Mining Corp on September 4, 2024 and sell it today you would lose (18,400) from holding Endeavour Mining Corp or give up 10.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Target Corp vs. Endeavour Mining Corp
Performance |
| Timeline |
| Target Corp |
| Endeavour Mining Corp |
Target Corp and Endeavour Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Target Corp and Endeavour Mining
The main advantage of trading using opposite Target Corp and Endeavour Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Target Corp 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.| Target Corp vs. Samsung Electronics Co | Target Corp vs. Samsung Electronics Co | Target Corp vs. Hyundai Motor | Target Corp vs. Toyota Motor Corp |
| Endeavour Mining vs. Givaudan SA | Endeavour Mining vs. Antofagasta PLC | Endeavour Mining vs. Atalaya Mining | Endeavour Mining vs. Ferrexpo PLC |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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