Correlation Between Unite Group and Endeavour Mining
Can any of the company-specific risk be diversified away by investing in both Unite Group 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 Unite Group and Endeavour Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unite Group PLC and Endeavour Mining Corp, you can compare the effects of market volatilities on Unite Group 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 Unite Group with a short position of Endeavour Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unite Group and Endeavour Mining.
Diversification Opportunities for Unite Group and Endeavour Mining
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Unite and Endeavour is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Unite Group 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 Unite Group 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 Unite Group 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 Unite Group i.e., Unite Group and Endeavour Mining go up and down completely randomly.
Pair Corralation between Unite Group and Endeavour Mining
Assuming the 90 days trading horizon Unite Group PLC is expected to generate 0.56 times more return on investment than Endeavour Mining. However, Unite Group PLC is 1.77 times less risky than Endeavour Mining. It trades about -0.06 of its potential returns per unit of risk. Endeavour Mining Corp is currently generating about -0.19 per unit of risk. If you would invest 87,150 in Unite Group PLC on September 4, 2024 and sell it today you would lose (1,500) from holding Unite Group PLC or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unite Group PLC vs. Endeavour Mining Corp
Performance |
| Timeline |
| Unite Group PLC |
| Endeavour Mining Corp |
Unite Group and Endeavour Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unite Group and Endeavour Mining
The main advantage of trading using opposite Unite Group and Endeavour Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unite Group 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.| Unite Group vs. Endeavour Mining Corp | Unite Group vs. Jacquet Metal Service | Unite Group vs. Hansa Investment | Unite Group vs. Wheaton Precious Metals |
| Endeavour Mining vs. Givaudan SA | Endeavour Mining vs. Antofagasta PLC | Endeavour Mining vs. Atalaya Mining | Endeavour Mining vs. Ferrexpo PLC |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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