Correlation Between Endeavour Silver and RTG Mining

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

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

Diversification Opportunities for Endeavour Silver and RTG Mining

-0.17

Correlation Coefficient

Endeavour Silver  RTG Mining

Good diversification

The 3 months correlation between Endeavour and RTG is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Silver Corp and RTG Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RTG Mining and Endeavour Silver 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 Silver Corp are associated (or correlated) with RTG Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RTG Mining has no effect on the direction of Endeavour Silver i.e., Endeavour Silver and RTG Mining go up and down completely randomly.

Pair Corralation between Endeavour Silver and RTG Mining

Assuming the 90 days trading horizon Endeavour Silver Corp is expected to under-perform the RTG Mining. But the stock apears to be less risky and, when comparing its historical volatility, Endeavour Silver Corp is 3.8 times less risky than RTG Mining. The stock trades about -0.01 of its potential returns per unit of risk. The RTG Mining is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  4.00  in RTG Mining on September 13, 2024 and sell it today you would lose (1.50) from holding RTG Mining or give up 37.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.67%
Values	Daily Returns

Endeavour Silver Corp  vs.  RTG Mining

Endeavour Silver Corp

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Endeavour Silver Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Endeavour Silver displayed solid returns over the last few months and may actually be approaching a breakup point.

RTG Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RTG Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Endeavour Silver and RTG Mining

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

The idea behind Endeavour Silver Corp and RTG Mining 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 Transaction History module to view history of all your transactions and understand their impact on performance.