Correlation Between Endeavour Mining and Next PLC
Can any of the company-specific risk be diversified away by investing in both Endeavour Mining and Next 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 Next 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 Next PLC, you can compare the effects of market volatilities on Endeavour Mining and Next 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 Next PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavour Mining and Next PLC.
Diversification Opportunities for Endeavour Mining and Next PLC
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Endeavour and Next is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining Corp and Next PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next PLC 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 Next PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next PLC has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and Next PLC go up and down completely randomly.
Pair Corralation between Endeavour Mining and Next PLC
Assuming the 90 days trading horizon Endeavour Mining Corp is expected to under-perform the Next PLC. In addition to that, Endeavour Mining is 1.87 times more volatile than Next PLC. It trades about -0.24 of its total potential returns per unit of risk. Next PLC is currently generating about 0.14 per unit of volatility. If you would invest 988,200 in Next PLC on September 4, 2024 and sell it today you would earn a total of 32,800 from holding Next PLC or generate 3.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Endeavour Mining Corp vs. Next PLC
Performance |
| Timeline |
| Endeavour Mining Corp |
| Next PLC |
Endeavour Mining and Next PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Endeavour Mining and Next PLC
The main advantage of trading using opposite Endeavour Mining and Next PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endeavour Mining position performs unexpectedly, Next 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 Next PLC will offset losses from the drop in Next PLC's long position.| Endeavour Mining vs. Givaudan SA | Endeavour Mining vs. Antofagasta PLC | Endeavour Mining vs. Atalaya Mining | Endeavour Mining vs. Ferrexpo PLC |
| Next PLC vs. Advanced Medical Solutions | Next PLC vs. Ameriprise Financial | Next PLC vs. Edita Food Industries | Next PLC vs. Deltex Medical Group |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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