Correlation Between Endurance Gold and First Mining

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

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

Diversification Opportunities for Endurance Gold and First Mining

0.12

Correlation Coefficient

Endurance Gold  First Mining

Average diversification

The 3 months correlation between Endurance and First is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Endurance Gold and First Mining Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Mining Gold and Endurance Gold 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 Endurance Gold are associated (or correlated) with First Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Mining Gold has no effect on the direction of Endurance Gold i.e., Endurance Gold and First Mining go up and down completely randomly.

Pair Corralation between Endurance Gold and First Mining

Assuming the 90 days horizon Endurance Gold is expected to under-perform the First Mining. In addition to that, Endurance Gold is 1.01 times more volatile than First Mining Gold. It trades about -0.03 of its total potential returns per unit of risk. First Mining Gold is currently generating about 0.01 per unit of volatility. If you would invest  9.80  in First Mining Gold on September 3, 2024 and sell it today you would lose (0.40) from holding First Mining Gold or give up 4.08% of portfolio value over 90 days.

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

Endurance Gold  vs.  First Mining Gold

Endurance Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Endurance Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

First Mining Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Mining Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, First Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Endurance Gold and First Mining

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

The idea behind Endurance Gold and First Mining Gold 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.