Correlation Between Endurance Gold and Nine Mile

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

By analyzing existing cross correlation between Endurance Gold and Nine Mile Metals, you can compare the effects of market volatilities on Endurance Gold and Nine Mile 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 Nine Mile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endurance Gold and Nine Mile.

Diversification Opportunities for Endurance Gold and Nine Mile

0.48

Correlation Coefficient

Endurance Gold  Nine Mile

Very weak diversification

The 3 months correlation between Endurance and Nine is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Endurance Gold and Nine Mile Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Mile Metals 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 Nine Mile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nine Mile Metals has no effect on the direction of Endurance Gold i.e., Endurance Gold and Nine Mile go up and down completely randomly.

Pair Corralation between Endurance Gold and Nine Mile

Assuming the 90 days horizon Endurance Gold is expected to generate 0.46 times more return on investment than Nine Mile. However, Endurance Gold is 2.19 times less risky than Nine Mile. It trades about -0.01 of its potential returns per unit of risk. Nine Mile Metals is currently generating about 0.0 per unit of risk. If you would invest  18.00  in Endurance Gold on September 14, 2024 and sell it today you would lose (8.00) from holding Endurance Gold or give up 44.44% of portfolio value over 90 days.

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

Endurance Gold  vs.  Nine Mile Metals

Endurance Gold

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Endurance Gold are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Endurance Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Nine Mile Metals

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Endurance Gold and Nine Mile

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

The idea behind Endurance Gold and Nine Mile Metals 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.