Correlation Between Wheaton Precious and Endeavour Mining

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

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

Diversification Opportunities for Wheaton Precious and Endeavour Mining

0.37

Correlation Coefficient

Wheaton Precious  Endeavour Mining

Weak diversification

The 3 months correlation between Wheaton and Endeavour is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Wheaton Precious Metals and Endeavour Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endeavour Mining Corp and Wheaton Precious 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 Wheaton Precious Metals are associated (or correlated) with Endeavour Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endeavour Mining Corp has no effect on the direction of Wheaton Precious i.e., Wheaton Precious and Endeavour Mining go up and down completely randomly.

Pair Corralation between Wheaton Precious and Endeavour Mining

Assuming the 90 days trading horizon Wheaton Precious Metals is expected to generate 0.85 times more return on investment than Endeavour Mining. However, Wheaton Precious Metals is 1.18 times less risky than Endeavour Mining. It trades about 0.01 of its potential returns per unit of risk. Endeavour Mining Corp is currently generating about -0.14 per unit of risk. If you would invest  8,245  in Wheaton Precious Metals on September 30, 2024 and sell it today you would lose (18.00) from holding Wheaton Precious Metals or give up 0.22% of portfolio value over 90 days.

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

Wheaton Precious Metals  vs.  Endeavour Mining Corp

Wheaton Precious Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wheaton Precious Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Wheaton Precious is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

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.

Pair Trading with Wheaton Precious and Endeavour Mining

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

The idea behind Wheaton Precious Metals and Endeavour Mining 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.