Correlation Between Endeavour Mining and MELIA HOTELS
Can any of the company-specific risk be diversified away by investing in both Endeavour Mining and MELIA HOTELS 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 MELIA HOTELS 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 MELIA HOTELS, you can compare the effects of market volatilities on Endeavour Mining and MELIA HOTELS 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 MELIA HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavour Mining and MELIA HOTELS.
Diversification Opportunities for Endeavour Mining and MELIA HOTELS
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Endeavour and MELIA is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining PLC and MELIA HOTELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MELIA HOTELS 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 MELIA HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MELIA HOTELS has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and MELIA HOTELS go up and down completely randomly.
Pair Corralation between Endeavour Mining and MELIA HOTELS
Assuming the 90 days trading horizon Endeavour Mining PLC is expected to under-perform the MELIA HOTELS. In addition to that, Endeavour Mining is 1.7 times more volatile than MELIA HOTELS. It trades about -0.09 of its total potential returns per unit of risk. MELIA HOTELS is currently generating about -0.11 per unit of volatility. If you would invest 733.00 in MELIA HOTELS on October 13, 2024 and sell it today you would lose (19.00) from holding MELIA HOTELS or give up 2.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Endeavour Mining PLC vs. MELIA HOTELS
Performance |
| Timeline |
| Endeavour Mining PLC |
| MELIA HOTELS |
Endeavour Mining and MELIA HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Endeavour Mining and MELIA HOTELS
The main advantage of trading using opposite Endeavour Mining and MELIA HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endeavour Mining position performs unexpectedly, MELIA HOTELS 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 MELIA HOTELS will offset losses from the drop in MELIA HOTELS's long position.| Endeavour Mining vs. Dairy Farm International | Endeavour Mining vs. VIENNA INSURANCE GR | Endeavour Mining vs. WIMFARM SA EO | Endeavour Mining vs. Vienna Insurance Group |
| MELIA HOTELS vs. Yanzhou Coal Mining | MELIA HOTELS vs. USWE SPORTS AB | MELIA HOTELS vs. Playtech plc | MELIA HOTELS vs. Endeavour Mining PLC |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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