Correlation Between Endeavour Mining and Addtech
Can any of the company-specific risk be diversified away by investing in both Endeavour Mining and Addtech 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 Addtech 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 Addtech, you can compare the effects of market volatilities on Endeavour Mining and Addtech 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 Addtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavour Mining and Addtech.
Diversification Opportunities for Endeavour Mining and Addtech
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Endeavour and Addtech is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining Corp and Addtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addtech 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 Addtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addtech has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and Addtech go up and down completely randomly.
Pair Corralation between Endeavour Mining and Addtech
Assuming the 90 days trading horizon Endeavour Mining is expected to generate 36.53 times less return on investment than Addtech. But when comparing it to its historical volatility, Endeavour Mining Corp is 1.01 times less risky than Addtech. It trades about 0.0 of its potential returns per unit of risk. Addtech is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 15,230 in Addtech on August 28, 2024 and sell it today you would earn a total of 14,720 from holding Addtech or generate 96.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Endeavour Mining Corp vs. Addtech
Performance |
| Timeline |
| Endeavour Mining Corp |
| Addtech |
Endeavour Mining and Addtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Endeavour Mining and Addtech
The main advantage of trading using opposite Endeavour Mining and Addtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endeavour Mining position performs unexpectedly, Addtech 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 Addtech will offset losses from the drop in Addtech's long position.| Endeavour Mining vs. Leroy Seafood Group | Endeavour Mining vs. Allianz Technology Trust | Endeavour Mining vs. Microchip Technology | Endeavour Mining vs. Oxford Technology 2 |
| Addtech vs. Samsung Electronics Co | Addtech vs. Samsung Electronics Co | Addtech vs. Hyundai Motor | Addtech vs. Toyota Motor 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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