Correlation Between Wesdome Gold and Endeavour Mining
Can any of the company-specific risk be diversified away by investing in both Wesdome Gold 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 Wesdome Gold and Endeavour Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wesdome Gold Mines and Endeavour Mining Corp, you can compare the effects of market volatilities on Wesdome Gold 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 Wesdome Gold with a short position of Endeavour Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesdome Gold and Endeavour Mining.
Diversification Opportunities for Wesdome Gold and Endeavour Mining
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wesdome and Endeavour is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Wesdome Gold Mines 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 Wesdome Gold 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 Wesdome Gold Mines 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 Wesdome Gold i.e., Wesdome Gold and Endeavour Mining go up and down completely randomly.
Pair Corralation between Wesdome Gold and Endeavour Mining
Assuming the 90 days trading horizon Wesdome Gold Mines is expected to generate 1.1 times more return on investment than Endeavour Mining. However, Wesdome Gold is 1.1 times more volatile than Endeavour Mining Corp. It trades about 0.07 of its potential returns per unit of risk. Endeavour Mining Corp is currently generating about 0.01 per unit of risk. If you would invest 786.00 in Wesdome Gold Mines on September 1, 2024 and sell it today you would earn a total of 437.00 from holding Wesdome Gold Mines or generate 55.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wesdome Gold Mines vs. Endeavour Mining Corp
Performance |
| Timeline |
| Wesdome Gold Mines |
| Endeavour Mining Corp |
Wesdome Gold and Endeavour Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wesdome Gold and Endeavour Mining
The main advantage of trading using opposite Wesdome Gold and Endeavour Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesdome Gold 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.| Wesdome Gold vs. OceanaGold | Wesdome Gold vs. Torex Gold Resources | Wesdome Gold vs. Alamos Gold | Wesdome Gold vs. Dundee Precious Metals |
| Endeavour Mining vs. SSR Mining | Endeavour Mining vs. Centerra Gold | Endeavour Mining vs. Alamos Gold | Endeavour Mining vs. Osisko Gold Ro |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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