Correlation Between Rheinmetall and Endeavour Mining
Can any of the company-specific risk be diversified away by investing in both Rheinmetall 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 Rheinmetall and Endeavour Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rheinmetall AG and Endeavour Mining Corp, you can compare the effects of market volatilities on Rheinmetall 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 Rheinmetall with a short position of Endeavour Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rheinmetall and Endeavour Mining.
Diversification Opportunities for Rheinmetall and Endeavour Mining
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Rheinmetall and Endeavour is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Rheinmetall AG 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 Rheinmetall 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 Rheinmetall AG 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 Rheinmetall i.e., Rheinmetall and Endeavour Mining go up and down completely randomly.
Pair Corralation between Rheinmetall and Endeavour Mining
Assuming the 90 days trading horizon Rheinmetall AG is expected to generate 1.14 times more return on investment than Endeavour Mining. However, Rheinmetall is 1.14 times more volatile than Endeavour Mining Corp. It trades about 0.43 of its potential returns per unit of risk. Endeavour Mining Corp is currently generating about 0.27 per unit of risk. If you would invest 61,900 in Rheinmetall AG on October 28, 2024 and sell it today you would earn a total of 11,620 from holding Rheinmetall AG or generate 18.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rheinmetall AG vs. Endeavour Mining Corp
Performance |
| Timeline |
| Rheinmetall AG |
| Endeavour Mining Corp |
Rheinmetall and Endeavour Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rheinmetall and Endeavour Mining
The main advantage of trading using opposite Rheinmetall and Endeavour Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rheinmetall 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.| Rheinmetall vs. Endeavour Mining Corp | Rheinmetall vs. Griffin Mining | Rheinmetall vs. Eastinco Mining Exploration | Rheinmetall vs. Fortuna Silver Mines |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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