Correlation Between MT Bank and Endeavour Mining

Can any of the company-specific risk be diversified away by investing in both MT Bank 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 MT Bank and Endeavour Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MT Bank Corp and Endeavour Mining Corp, you can compare the effects of market volatilities on MT Bank 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 MT Bank with a short position of Endeavour Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of MT Bank and Endeavour Mining.

Diversification Opportunities for MT Bank and Endeavour Mining

-0.58

Correlation Coefficient

MT Bank  Endeavour Mining

Excellent diversification

The 3 months correlation between 0JW2 and Endeavour is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding MT Bank Corp 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 MT Bank 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 MT Bank Corp 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 MT Bank i.e., MT Bank and Endeavour Mining go up and down completely randomly.

Pair Corralation between MT Bank and Endeavour Mining

Assuming the 90 days trading horizon MT Bank Corp is expected to generate 0.95 times more return on investment than Endeavour Mining. However, MT Bank Corp is 1.05 times less risky than Endeavour Mining. It trades about 0.04 of its potential returns per unit of risk. Endeavour Mining Corp is currently generating about 0.0 per unit of risk. If you would invest  13,802  in MT Bank Corp on September 26, 2024 and sell it today you would earn a total of  5,275  from holding MT Bank Corp or generate 38.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.81%
Values	Daily Returns

MT Bank Corp  vs.  Endeavour Mining Corp

MT Bank Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MT Bank Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, MT Bank may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with MT Bank and Endeavour Mining

The main advantage of trading using opposite MT Bank and Endeavour Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MT Bank 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.

The idea behind MT Bank Corp and Endeavour Mining Corp 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.