Correlation Between Givaudan and Endeavour Mining
Can any of the company-specific risk be diversified away by investing in both Givaudan 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 Givaudan and Endeavour Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Givaudan SA and Endeavour Mining Corp, you can compare the effects of market volatilities on Givaudan 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 Givaudan with a short position of Endeavour Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Givaudan and Endeavour Mining.
Diversification Opportunities for Givaudan and Endeavour Mining
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Givaudan and Endeavour is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Givaudan SA 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 Givaudan 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 Givaudan SA 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 Givaudan i.e., Givaudan and Endeavour Mining go up and down completely randomly.
Pair Corralation between Givaudan and Endeavour Mining
Assuming the 90 days trading horizon Givaudan SA is expected to generate 0.57 times more return on investment than Endeavour Mining. However, Givaudan SA is 1.76 times less risky than Endeavour Mining. It trades about 0.05 of its potential returns per unit of risk. Endeavour Mining Corp is currently generating about 0.01 per unit of risk. If you would invest 300,742 in Givaudan SA on September 4, 2024 and sell it today you would earn a total of 85,408 from holding Givaudan SA or generate 28.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Givaudan SA vs. Endeavour Mining Corp
Performance |
| Timeline |
| Givaudan SA |
| Endeavour Mining Corp |
Givaudan and Endeavour Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Givaudan and Endeavour Mining
The main advantage of trading using opposite Givaudan and Endeavour Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Givaudan 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.| Givaudan vs. Sabre Insurance Group | Givaudan vs. St Galler Kantonalbank | Givaudan vs. Cembra Money Bank | Givaudan vs. UNIQA Insurance Group |
| 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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