Correlation Between Endeavour Mining and United States
Can any of the company-specific risk be diversified away by investing in both Endeavour Mining and United States 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 United States 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 United States Steel, you can compare the effects of market volatilities on Endeavour Mining and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavour Mining and United States.
Diversification Opportunities for Endeavour Mining and United States
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Endeavour and United is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining PLC and United States Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Steel 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Steel has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and United States go up and down completely randomly.
Pair Corralation between Endeavour Mining and United States
Assuming the 90 days trading horizon Endeavour Mining PLC is expected to under-perform the United States. But the stock apears to be less risky and, when comparing its historical volatility, Endeavour Mining PLC is 1.79 times less risky than United States. The stock trades about -0.07 of its potential returns per unit of risk. The United States Steel is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 3,153 in United States Steel on October 17, 2024 and sell it today you would earn a total of 353.00 from holding United States Steel or generate 11.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Endeavour Mining PLC vs. United States Steel
Performance |
| Timeline |
| Endeavour Mining PLC |
| United States Steel |
Endeavour Mining and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Endeavour Mining and United States
The main advantage of trading using opposite Endeavour Mining and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endeavour Mining position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| Endeavour Mining vs. CITY OFFICE REIT | Endeavour Mining vs. Mitsui Chemicals | Endeavour Mining vs. Corporate Office Properties | Endeavour Mining vs. X FAB Silicon Foundries |
| United States vs. Harmony Gold Mining | United States vs. Endeavour Mining PLC | United States vs. Tencent Music Entertainment | United States vs. MINCO SILVER |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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