Correlation Between Endeavour Silver and American Copper
Can any of the company-specific risk be diversified away by investing in both Endeavour Silver and American Copper 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 Silver and American Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Endeavour Silver Corp and American Copper Development, you can compare the effects of market volatilities on Endeavour Silver and American Copper 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 Silver with a short position of American Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavour Silver and American Copper.
Diversification Opportunities for Endeavour Silver and American Copper
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Endeavour and American is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Silver Corp and American Copper Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Copper Deve and Endeavour Silver 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 Silver Corp are associated (or correlated) with American Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Copper Deve has no effect on the direction of Endeavour Silver i.e., Endeavour Silver and American Copper go up and down completely randomly.
Pair Corralation between Endeavour Silver and American Copper
Considering the 90-day investment horizon Endeavour Silver is expected to generate 1.68 times less return on investment than American Copper. But when comparing it to its historical volatility, Endeavour Silver Corp is 3.74 times less risky than American Copper. It trades about 0.1 of its potential returns per unit of risk. American Copper Development is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 8.61 in American Copper Development on November 3, 2024 and sell it today you would lose (6.21) from holding American Copper Development or give up 72.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Endeavour Silver Corp vs. American Copper Development
Performance |
| Timeline |
| Endeavour Silver Corp |
| American Copper Deve |
Endeavour Silver and American Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Endeavour Silver and American Copper
The main advantage of trading using opposite Endeavour Silver and American Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endeavour Silver position performs unexpectedly, American Copper 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 American Copper will offset losses from the drop in American Copper's long position.| Endeavour Silver vs. McEwen Mining | Endeavour Silver vs. SilverCrest Metals | Endeavour Silver vs. Avino Silver Gold | Endeavour Silver vs. Compania de Minas |
| American Copper vs. EastGroup Properties | American Copper vs. National CineMedia | American Copper vs. Catalyst Metals Limited | American Copper vs. Fluent Inc |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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