Correlation Between Endeavour Mining and 88 Energy
Can any of the company-specific risk be diversified away by investing in both Endeavour Mining and 88 Energy 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 88 Energy 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 88 Energy, you can compare the effects of market volatilities on Endeavour Mining and 88 Energy 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 88 Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavour Mining and 88 Energy.
Diversification Opportunities for Endeavour Mining and 88 Energy
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Endeavour and 88E is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining Corp and 88 Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 88 Energy 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 88 Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 88 Energy has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and 88 Energy go up and down completely randomly.
Pair Corralation between Endeavour Mining and 88 Energy
Assuming the 90 days trading horizon Endeavour Mining Corp is expected to under-perform the 88 Energy. In addition to that, Endeavour Mining is 1.07 times more volatile than 88 Energy. It trades about -0.25 of its total potential returns per unit of risk. 88 Energy is currently generating about -0.23 per unit of volatility. If you would invest 10.00 in 88 Energy on September 2, 2024 and sell it today you would lose (1.00) from holding 88 Energy or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Endeavour Mining Corp vs. 88 Energy
Performance |
| Timeline |
| Endeavour Mining Corp |
| 88 Energy |
Endeavour Mining and 88 Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Endeavour Mining and 88 Energy
The main advantage of trading using opposite Endeavour Mining and 88 Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endeavour Mining position performs unexpectedly, 88 Energy 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 88 Energy will offset losses from the drop in 88 Energy's long position.| Endeavour Mining vs. Everyman Media Group | Endeavour Mining vs. Schweiter Technologies AG | Endeavour Mining vs. XLMedia PLC | Endeavour Mining vs. PureTech Health plc |
| 88 Energy vs. LPKF Laser Electronics | 88 Energy vs. Cairo Communication SpA | 88 Energy vs. STMicroelectronics NV | 88 Energy vs. JB Hunt Transport |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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