Correlation Between Endeavour Mining and Newmont Goldcorp

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

Diversification Opportunities for Endeavour Mining and Newmont Goldcorp

0.92

Correlation Coefficient

Endeavour Mining  Newmont Goldcorp

Almost no diversification

The 3 months correlation between Endeavour and Newmont is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining Corp and Newmont Goldcorp Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmont Goldcorp Corp 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 Newmont Goldcorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmont Goldcorp Corp has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and Newmont Goldcorp go up and down completely randomly.

Pair Corralation between Endeavour Mining and Newmont Goldcorp

Assuming the 90 days trading horizon Endeavour Mining Corp is expected to generate 0.9 times more return on investment than Newmont Goldcorp. However, Endeavour Mining Corp is 1.11 times less risky than Newmont Goldcorp. It trades about -0.14 of its potential returns per unit of risk. Newmont Goldcorp Corp is currently generating about -0.17 per unit of risk. If you would invest  3,214  in Endeavour Mining Corp on September 30, 2024 and sell it today you would lose (606.00) from holding Endeavour Mining Corp or give up 18.86% of portfolio value over 90 days.

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

Endeavour Mining Corp  vs.  Newmont Goldcorp Corp

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 unfluctuating performance in the last few months, the Stock's basic 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.

Newmont Goldcorp Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Newmont Goldcorp Corp 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 basic 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 Mining and Newmont Goldcorp

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

The idea behind Endeavour Mining Corp and Newmont Goldcorp 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.

Check out your portfolio center.

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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..