Correlation Between United Parcel and Endeavour Mining
Can any of the company-specific risk be diversified away by investing in both United Parcel 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 United Parcel and Endeavour Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Parcel Service and Endeavour Mining Corp, you can compare the effects of market volatilities on United Parcel 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 United Parcel with a short position of Endeavour Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Parcel and Endeavour Mining.
Diversification Opportunities for United Parcel and Endeavour Mining
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between United and Endeavour is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding United Parcel Service 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 United Parcel 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 United Parcel Service 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 United Parcel i.e., United Parcel and Endeavour Mining go up and down completely randomly.
Pair Corralation between United Parcel and Endeavour Mining
Assuming the 90 days trading horizon United Parcel Service is expected to generate 0.57 times more return on investment than Endeavour Mining. However, United Parcel Service is 1.74 times less risky than Endeavour Mining. It trades about 0.14 of its potential returns per unit of risk. Endeavour Mining Corp is currently generating about -0.22 per unit of risk. If you would invest 13,108 in United Parcel Service on September 3, 2024 and sell it today you would earn a total of 472.00 from holding United Parcel Service or generate 3.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Parcel Service vs. Endeavour Mining Corp
Performance |
| Timeline |
| United Parcel Service |
| Endeavour Mining Corp |
United Parcel and Endeavour Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Parcel and Endeavour Mining
The main advantage of trading using opposite United Parcel and Endeavour Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Parcel 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.| United Parcel vs. Endeavour Mining Corp | United Parcel vs. CleanTech Lithium plc | United Parcel vs. Neometals | United Parcel vs. New Residential Investment |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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