Correlation Between McEwen Mining and Endeavour Silver

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

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

Diversification Opportunities for McEwen Mining and Endeavour Silver

0.55

Correlation Coefficient

McEwen Mining  Endeavour Silver

Very weak diversification

The 3 months correlation between McEwen and Endeavour is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining 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 McEwen 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 McEwen Mining 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 McEwen Mining i.e., McEwen Mining and Endeavour Silver go up and down completely randomly.

Pair Corralation between McEwen Mining and Endeavour Silver

Considering the 90-day investment horizon McEwen Mining is expected to generate 1.1 times more return on investment than Endeavour Silver. However, McEwen Mining is 1.1 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 -0.18 per unit of risk. If you would invest  821.00  in McEwen Mining on September 24, 2024 and sell it today you would lose (29.00) from holding McEwen Mining or give up 3.53% of portfolio value over 90 days.

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

McEwen Mining  vs.  Endeavour Silver Corp

McEwen Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days McEwen Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Endeavour Silver Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Endeavour Silver Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Endeavour Silver is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with McEwen Mining and Endeavour Silver

The main advantage of trading using opposite McEwen Mining and Endeavour Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining 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 McEwen Mining 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.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.