Correlation Between Endeavour Mining and TOMBADOR IRON
Can any of the company-specific risk be diversified away by investing in both Endeavour Mining and TOMBADOR IRON 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 TOMBADOR IRON 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 TOMBADOR IRON LTD, you can compare the effects of market volatilities on Endeavour Mining and TOMBADOR IRON 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 TOMBADOR IRON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavour Mining and TOMBADOR IRON.
Diversification Opportunities for Endeavour Mining and TOMBADOR IRON
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Endeavour and TOMBADOR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining PLC and TOMBADOR IRON LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOMBADOR IRON LTD 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 TOMBADOR IRON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOMBADOR IRON LTD has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and TOMBADOR IRON go up and down completely randomly.
Pair Corralation between Endeavour Mining and TOMBADOR IRON
Assuming the 90 days trading horizon Endeavour Mining is expected to generate 74.5 times less return on investment than TOMBADOR IRON. But when comparing it to its historical volatility, Endeavour Mining PLC is 20.16 times less risky than TOMBADOR IRON. It trades about 0.02 of its potential returns per unit of risk. TOMBADOR IRON LTD is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.40 in TOMBADOR IRON LTD on December 11, 2024 and sell it today you would earn a total of 9.60 from holding TOMBADOR IRON LTD or generate 2400.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.68% |
| Values | Daily Returns |
Endeavour Mining PLC vs. TOMBADOR IRON LTD
Performance |
| Timeline |
| Endeavour Mining PLC |
| TOMBADOR IRON LTD |
Endeavour Mining and TOMBADOR IRON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Endeavour Mining and TOMBADOR IRON
The main advantage of trading using opposite Endeavour Mining and TOMBADOR IRON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endeavour Mining position performs unexpectedly, TOMBADOR IRON 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 TOMBADOR IRON will offset losses from the drop in TOMBADOR IRON's long position.| Endeavour Mining vs. Easy Software AG | ||
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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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