Correlation Between Endeavour Mining and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Endeavour Mining and Samsung Electronics 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 Samsung Electronics 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 Samsung Electronics Co, you can compare the effects of market volatilities on Endeavour Mining and Samsung Electronics 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 Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavour Mining and Samsung Electronics.
Diversification Opportunities for Endeavour Mining and Samsung Electronics
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Endeavour and Samsung is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining Corp and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and Samsung Electronics go up and down completely randomly.
Pair Corralation between Endeavour Mining and Samsung Electronics
Assuming the 90 days trading horizon Endeavour Mining Corp is expected to under-perform the Samsung Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Endeavour Mining Corp is 1.01 times less risky than Samsung Electronics. The stock trades about -0.18 of its potential returns per unit of risk. The Samsung Electronics Co is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 101,100 in Samsung Electronics Co on September 19, 2024 and sell it today you would lose (6,800) from holding Samsung Electronics Co or give up 6.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Endeavour Mining Corp vs. Samsung Electronics Co
Performance |
| Timeline |
| Endeavour Mining Corp |
| Samsung Electronics |
Endeavour Mining and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Endeavour Mining and Samsung Electronics
The main advantage of trading using opposite Endeavour Mining and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endeavour Mining position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| Endeavour Mining vs. Givaudan SA | Endeavour Mining vs. Antofagasta PLC | Endeavour Mining vs. Ferrexpo PLC | Endeavour Mining vs. Atalaya Mining |
| Samsung Electronics vs. Rockfire Resources plc | Samsung Electronics vs. Tlou Energy | Samsung Electronics vs. Ikigai Ventures | Samsung Electronics vs. Falcon Oil Gas |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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