Correlation Between Endeavour Mining and NORSKE SKOG
Can any of the company-specific risk be diversified away by investing in both Endeavour Mining and NORSKE SKOG 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 Endeavour Mining and NORSKE SKOG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Endeavour Mining PLC and NORSKE SKOG AS, you can compare the effects of market volatilities on Endeavour Mining and NORSKE SKOG 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 Endeavour Mining with a short position of NORSKE SKOG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavour Mining and NORSKE SKOG.
Diversification Opportunities for Endeavour Mining and NORSKE SKOG
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Endeavour and NORSKE is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining PLC and NORSKE SKOG AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORSKE SKOG AS and Endeavour Mining 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 Endeavour Mining PLC are associated (or correlated) with NORSKE SKOG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORSKE SKOG AS has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and NORSKE SKOG go up and down completely randomly.
Pair Corralation between Endeavour Mining and NORSKE SKOG
Assuming the 90 days trading horizon Endeavour Mining PLC is expected to generate 0.69 times more return on investment than NORSKE SKOG. However, Endeavour Mining PLC is 1.46 times less risky than NORSKE SKOG. It trades about 0.1 of its potential returns per unit of risk. NORSKE SKOG AS is currently generating about -0.12 per unit of risk. If you would invest 1,736 in Endeavour Mining PLC on October 20, 2024 and sell it today you would earn a total of 62.00 from holding Endeavour Mining PLC or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Endeavour Mining PLC vs. NORSKE SKOG AS
Performance |
| Timeline |
| Endeavour Mining PLC |
| NORSKE SKOG AS |
Endeavour Mining and NORSKE SKOG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Endeavour Mining and NORSKE SKOG
The main advantage of trading using opposite Endeavour Mining and NORSKE SKOG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endeavour Mining position performs unexpectedly, NORSKE SKOG 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 NORSKE SKOG will offset losses from the drop in NORSKE SKOG's long position.| Endeavour Mining vs. Apple Inc | Endeavour Mining vs. Apple Inc | Endeavour Mining vs. Apple Inc | Endeavour Mining vs. Apple Inc |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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