Correlation Between Backstageplay and Endeavour Silver

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

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

Diversification Opportunities for Backstageplay and Endeavour Silver

-0.93

Correlation Coefficient

Backstageplay  Endeavour Silver

Pay attention - limited upside

The 3 months correlation between Backstageplay and Endeavour is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Backstageplay and Endeavour Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endeavour Silver Corp and Backstageplay 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 Backstageplay are associated (or correlated) with Endeavour Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endeavour Silver Corp has no effect on the direction of Backstageplay i.e., Backstageplay and Endeavour Silver go up and down completely randomly.

Pair Corralation between Backstageplay and Endeavour Silver

Given the investment horizon of 90 days Backstageplay is expected to generate 3.17 times more return on investment than Endeavour Silver. However, Backstageplay is 3.17 times more volatile than Endeavour Silver Corp. It trades about 0.03 of its potential returns per unit of risk. Endeavour Silver Corp is currently generating about 0.0 per unit of risk. If you would invest  11.00  in Backstageplay on February 7, 2024 and sell it today you would lose (6.00) from holding Backstageplay or give up 54.55% of portfolio value over 90 days.

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

Backstageplay  vs.  Endeavour Silver Corp

Backstageplay

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Backstageplay 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 fairly stable which may send shares a bit higher in June 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Endeavour Silver Corp

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Endeavour Silver Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Endeavour Silver displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Backstageplay and Endeavour Silver

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

The idea behind Backstageplay and Endeavour Silver 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.