Correlation Between Endeavour Mining and Carsales
Can any of the company-specific risk be diversified away by investing in both Endeavour Mining and Carsales 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 Carsales 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 CarsalesCom, you can compare the effects of market volatilities on Endeavour Mining and Carsales 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 Carsales. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavour Mining and Carsales.
Diversification Opportunities for Endeavour Mining and Carsales
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Endeavour and Carsales is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining PLC and CarsalesCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarsalesCom 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 Carsales. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarsalesCom has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and Carsales go up and down completely randomly.
Pair Corralation between Endeavour Mining and Carsales
Assuming the 90 days trading horizon Endeavour Mining PLC is expected to under-perform the Carsales. In addition to that, Endeavour Mining is 1.64 times more volatile than CarsalesCom. It trades about -0.05 of its total potential returns per unit of risk. CarsalesCom is currently generating about -0.03 per unit of volatility. If you would invest 2,280 in CarsalesCom on October 14, 2024 and sell it today you would lose (20.00) from holding CarsalesCom or give up 0.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
Endeavour Mining PLC vs. CarsalesCom
Performance |
| Timeline |
| Endeavour Mining PLC |
| CarsalesCom |
Endeavour Mining and Carsales Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Endeavour Mining and Carsales
The main advantage of trading using opposite Endeavour Mining and Carsales positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endeavour Mining position performs unexpectedly, Carsales 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 Carsales will offset losses from the drop in Carsales' long position.| Endeavour Mining vs. Apple Inc | Endeavour Mining vs. Apple Inc | Endeavour Mining vs. Apple Inc | Endeavour Mining vs. Apple Inc |
| Carsales vs. MAG SILVER | Carsales vs. Nomad Foods | Carsales vs. De Grey Mining | Carsales 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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