Correlation Between Endeavour Mining and ANGANG STEEL
Can any of the company-specific risk be diversified away by investing in both Endeavour Mining and ANGANG STEEL 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 ANGANG STEEL 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 ANGANG STEEL H , you can compare the effects of market volatilities on Endeavour Mining and ANGANG STEEL 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 ANGANG STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavour Mining and ANGANG STEEL.
Diversification Opportunities for Endeavour Mining and ANGANG STEEL
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Endeavour and ANGANG is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining PLC and ANGANG STEEL H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGANG STEEL H 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 ANGANG STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGANG STEEL H has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and ANGANG STEEL go up and down completely randomly.
Pair Corralation between Endeavour Mining and ANGANG STEEL
Assuming the 90 days trading horizon Endeavour Mining PLC is expected to generate 0.69 times more return on investment than ANGANG STEEL. However, Endeavour Mining PLC is 1.45 times less risky than ANGANG STEEL. It trades about 0.02 of its potential returns per unit of risk. ANGANG STEEL H is currently generating about 0.01 per unit of risk. If you would invest 1,873 in Endeavour Mining PLC on December 11, 2024 and sell it today you would earn a total of 83.00 from holding Endeavour Mining PLC or generate 4.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Endeavour Mining PLC vs. ANGANG STEEL H
Performance |
| Timeline |
| Endeavour Mining PLC |
| ANGANG STEEL H |
Endeavour Mining and ANGANG STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Endeavour Mining and ANGANG STEEL
The main advantage of trading using opposite Endeavour Mining and ANGANG STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endeavour Mining position performs unexpectedly, ANGANG STEEL 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 ANGANG STEEL will offset losses from the drop in ANGANG STEEL'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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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