Correlation Between Endeavour Mining and Western Copper
Can any of the company-specific risk be diversified away by investing in both Endeavour Mining and Western Copper 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 Western Copper 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 Western Copper and, you can compare the effects of market volatilities on Endeavour Mining and Western Copper 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 Western Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavour Mining and Western Copper.
Diversification Opportunities for Endeavour Mining and Western Copper
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Endeavour and Western is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining PLC and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper 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 Western Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Copper has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and Western Copper go up and down completely randomly.
Pair Corralation between Endeavour Mining and Western Copper
Assuming the 90 days trading horizon Endeavour Mining PLC is expected to generate 0.84 times more return on investment than Western Copper. However, Endeavour Mining PLC is 1.19 times less risky than Western Copper. It trades about 0.13 of its potential returns per unit of risk. Western Copper and is currently generating about -0.02 per unit of risk. If you would invest 1,818 in Endeavour Mining PLC on November 3, 2024 and sell it today you would earn a total of 122.00 from holding Endeavour Mining PLC or generate 6.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Endeavour Mining PLC vs. Western Copper and
Performance |
| Timeline |
| Endeavour Mining PLC |
| Western Copper |
Endeavour Mining and Western Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Endeavour Mining and Western Copper
The main advantage of trading using opposite Endeavour Mining and Western Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endeavour Mining position performs unexpectedly, Western Copper 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 Western Copper will offset losses from the drop in Western Copper's long position.| Endeavour Mining vs. US Physical Therapy | Endeavour Mining vs. RCI Hospitality Holdings | Endeavour Mining vs. EPSILON HEALTHCARE LTD | Endeavour Mining vs. Casio Computer CoLtd |
| Western Copper vs. BHP Group Limited | Western Copper vs. Rio Tinto Group | Western Copper vs. Vale SA | Western Copper vs. Vale SA |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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