Correlation Between Endeavour Mining and Addtech

Can any of the company-specific risk be diversified away by investing in both Endeavour Mining and Addtech 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 Addtech 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 Addtech, you can compare the effects of market volatilities on Endeavour Mining and Addtech 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 Addtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavour Mining and Addtech.

Diversification Opportunities for Endeavour Mining and Addtech

-0.15

Correlation Coefficient

Endeavour Mining  Addtech

Good diversification

The 3 months correlation between Endeavour and Addtech is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining Corp and Addtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addtech 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 Addtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addtech has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and Addtech go up and down completely randomly.

Pair Corralation between Endeavour Mining and Addtech

Assuming the 90 days trading horizon Endeavour Mining Corp is expected to generate 1.39 times more return on investment than Addtech. However, Endeavour Mining is 1.39 times more volatile than Addtech. It trades about 0.01 of its potential returns per unit of risk. Addtech is currently generating about -0.06 per unit of risk. If you would invest  154,576  in Endeavour Mining Corp on September 1, 2024 and sell it today you would lose (176.00) from holding Endeavour Mining Corp or give up 0.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

Endeavour Mining Corp  vs.  Addtech

Endeavour Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Endeavour Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Endeavour Mining is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Addtech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Addtech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Endeavour Mining and Addtech

The main advantage of trading using opposite Endeavour Mining and Addtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endeavour Mining position performs unexpectedly, Addtech 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 Addtech will offset losses from the drop in Addtech's long position.

The idea behind Endeavour Mining Corp and Addtech pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.