Correlation Between Endeavour Mining and Fidelity China

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

Diversification Opportunities for Endeavour Mining and Fidelity China

-0.32

Correlation Coefficient

Endeavour Mining  Fidelity China

Very good diversification

The 3 months correlation between Endeavour and Fidelity is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining Corp and Fidelity China Special in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity China Special 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 Fidelity China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity China Special has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and Fidelity China go up and down completely randomly.

Pair Corralation between Endeavour Mining and Fidelity China

Assuming the 90 days trading horizon Endeavour Mining Corp is expected to under-perform the Fidelity China. But the stock apears to be less risky and, when comparing its historical volatility, Endeavour Mining Corp is 1.22 times less risky than Fidelity China. The stock trades about -0.13 of its potential returns per unit of risk. The Fidelity China Special is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  17,160  in Fidelity China Special on September 16, 2024 and sell it today you would earn a total of  4,940  from holding Fidelity China Special or generate 28.79% return on investment over 90 days.

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

Endeavour Mining Corp  vs.  Fidelity China Special

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.

Fidelity China Special

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity China Special are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Fidelity China unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Endeavour Mining and Fidelity China

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

The idea behind Endeavour Mining Corp and Fidelity China Special 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.