Correlation Between Savannah Resources and Endeavour Mining
Can any of the company-specific risk be diversified away by investing in both Savannah Resources and Endeavour Mining 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 Savannah Resources and Endeavour Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Savannah Resources Plc and Endeavour Mining Corp, you can compare the effects of market volatilities on Savannah Resources and Endeavour Mining 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 Savannah Resources with a short position of Endeavour Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Savannah Resources and Endeavour Mining.
Diversification Opportunities for Savannah Resources and Endeavour Mining
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Savannah and Endeavour is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Savannah Resources Plc and Endeavour Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endeavour Mining Corp and Savannah Resources 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 Savannah Resources Plc are associated (or correlated) with Endeavour Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endeavour Mining Corp has no effect on the direction of Savannah Resources i.e., Savannah Resources and Endeavour Mining go up and down completely randomly.
Pair Corralation between Savannah Resources and Endeavour Mining
Assuming the 90 days trading horizon Savannah Resources Plc is expected to generate 0.81 times more return on investment than Endeavour Mining. However, Savannah Resources Plc is 1.23 times less risky than Endeavour Mining. It trades about 0.14 of its potential returns per unit of risk. Endeavour Mining Corp is currently generating about -0.13 per unit of risk. If you would invest 405.00 in Savannah Resources Plc on September 12, 2024 and sell it today you would earn a total of 15.00 from holding Savannah Resources Plc or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Savannah Resources Plc vs. Endeavour Mining Corp
Performance |
| Timeline |
| Savannah Resources Plc |
| Endeavour Mining Corp |
Savannah Resources and Endeavour Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Savannah Resources and Endeavour Mining
The main advantage of trading using opposite Savannah Resources and Endeavour Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Savannah Resources position performs unexpectedly, Endeavour Mining 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 Endeavour Mining will offset losses from the drop in Endeavour Mining's long position.| Savannah Resources vs. Givaudan SA | Savannah Resources vs. Antofagasta PLC | Savannah Resources vs. Ferrexpo PLC | Savannah Resources vs. Atalaya Mining |
| Endeavour Mining vs. Givaudan SA | Endeavour Mining vs. Antofagasta PLC | Endeavour Mining vs. Ferrexpo PLC | Endeavour Mining vs. Atalaya Mining |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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