Correlation Between Endeavour Mining and Naturhouse Health

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

Diversification Opportunities for Endeavour Mining and Naturhouse Health

0.24

Correlation Coefficient

Endeavour Mining  Naturhouse Health

Modest diversification

The 3 months correlation between Endeavour and Naturhouse is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining Corp and Naturhouse Health SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naturhouse Health 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 Naturhouse Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naturhouse Health has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and Naturhouse Health go up and down completely randomly.

Pair Corralation between Endeavour Mining and Naturhouse Health

Assuming the 90 days trading horizon Endeavour Mining Corp is expected to under-perform the Naturhouse Health. In addition to that, Endeavour Mining is 2.05 times more volatile than Naturhouse Health SA. It trades about -0.08 of its total potential returns per unit of risk. Naturhouse Health SA is currently generating about 0.29 per unit of volatility. If you would invest  164.00  in Naturhouse Health SA on May 4, 2024 and sell it today you would earn a total of  13.00  from holding Naturhouse Health SA or generate 7.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Endeavour Mining Corp  vs.  Naturhouse Health SA

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.

Naturhouse Health

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Naturhouse Health SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Naturhouse Health may actually be approaching a critical reversion point that can send shares even higher in September 2024.

Pair Trading with Endeavour Mining and Naturhouse Health

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

The idea behind Endeavour Mining Corp and Naturhouse Health SA 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .