Correlation Between Endeavour Mining and Wesdome Gold
Can any of the company-specific risk be diversified away by investing in both Endeavour Mining and Wesdome Gold 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 Wesdome Gold 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 Wesdome Gold Mines, you can compare the effects of market volatilities on Endeavour Mining and Wesdome Gold 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 Wesdome Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavour Mining and Wesdome Gold.
Diversification Opportunities for Endeavour Mining and Wesdome Gold
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Endeavour and Wesdome is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining Corp and Wesdome Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesdome Gold Mines 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 Wesdome Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesdome Gold Mines has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and Wesdome Gold go up and down completely randomly.
Pair Corralation between Endeavour Mining and Wesdome Gold
Assuming the 90 days trading horizon Endeavour Mining Corp is expected to generate 1.16 times more return on investment than Wesdome Gold. However, Endeavour Mining is 1.16 times more volatile than Wesdome Gold Mines. It trades about 0.22 of its potential returns per unit of risk. Wesdome Gold Mines is currently generating about 0.11 per unit of risk. If you would invest 2,758 in Endeavour Mining Corp on November 27, 2024 and sell it today you would earn a total of 287.00 from holding Endeavour Mining Corp or generate 10.41% 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. Wesdome Gold Mines
Performance |
| Timeline |
| Endeavour Mining Corp |
| Wesdome Gold Mines |
Endeavour Mining and Wesdome Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Endeavour Mining and Wesdome Gold
The main advantage of trading using opposite Endeavour Mining and Wesdome Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endeavour Mining position performs unexpectedly, Wesdome Gold 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 Wesdome Gold will offset losses from the drop in Wesdome Gold's long position.| Endeavour Mining vs. SSR Mining | Endeavour Mining vs. Centerra Gold | Endeavour Mining vs. Alamos Gold | Endeavour Mining vs. Osisko Gold Ro |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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