Correlation Between Endeavour Mining and BP PLC
Can any of the company-specific risk be diversified away by investing in both Endeavour Mining and BP PLC 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 BP PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Endeavour Mining Corp and BP PLC ADR, you can compare the effects of market volatilities on Endeavour Mining and BP PLC 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 BP PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavour Mining and BP PLC.
Diversification Opportunities for Endeavour Mining and BP PLC
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Endeavour and 0HKP is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining Corp and BP PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BP PLC ADR 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 Corp are associated (or correlated) with BP PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BP PLC ADR has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and BP PLC go up and down completely randomly.
Pair Corralation between Endeavour Mining and BP PLC
Assuming the 90 days trading horizon Endeavour Mining is expected to generate 4.31 times less return on investment than BP PLC. In addition to that, Endeavour Mining is 1.32 times more volatile than BP PLC ADR. It trades about 0.03 of its total potential returns per unit of risk. BP PLC ADR is currently generating about 0.17 per unit of volatility. If you would invest 2,864 in BP PLC ADR on September 14, 2024 and sell it today you would earn a total of 164.00 from holding BP PLC ADR or generate 5.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Endeavour Mining Corp vs. BP PLC ADR
Performance |
| Timeline |
| Endeavour Mining Corp |
| BP PLC ADR |
Endeavour Mining and BP PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Endeavour Mining and BP PLC
The main advantage of trading using opposite Endeavour Mining and BP PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endeavour Mining position performs unexpectedly, BP PLC 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 BP PLC will offset losses from the drop in BP PLC's long position.| Endeavour Mining vs. Givaudan SA | Endeavour Mining vs. Antofagasta PLC | Endeavour Mining vs. Ferrexpo PLC | Endeavour Mining vs. Atalaya Mining |
| BP PLC vs. Silvercorp Metals | BP PLC vs. CleanTech Lithium plc | BP PLC vs. Blackrock World Mining | BP PLC vs. Endeavour Mining Corp |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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