Correlation Between Endeavour Mining and Applied Materials

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Can any of the company-specific risk be diversified away by investing in both Endeavour Mining and Applied Materials 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 Endeavour Mining and Applied Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Endeavour Mining PLC and Applied Materials, you can compare the effects of market volatilities on Endeavour Mining and Applied Materials 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 Endeavour Mining with a short position of Applied Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavour Mining and Applied Materials.

Diversification Opportunities for Endeavour Mining and Applied Materials

0.11
  Correlation Coefficient

Average diversification

The 3 months correlation between Endeavour and Applied is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining PLC and Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Materials and Endeavour 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 Endeavour Mining PLC are associated (or correlated) with Applied Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Materials has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and Applied Materials go up and down completely randomly.

Pair Corralation between Endeavour Mining and Applied Materials

Assuming the 90 days trading horizon Endeavour Mining is expected to generate 2.86 times less return on investment than Applied Materials. But when comparing it to its historical volatility, Endeavour Mining PLC is 1.06 times less risky than Applied Materials. It trades about 0.07 of its potential returns per unit of risk. Applied Materials is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  12,509  in Applied Materials on April 23, 2025 and sell it today you would earn a total of  4,049  from holding Applied Materials or generate 32.37% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Endeavour Mining PLC  vs.  Applied Materials

 Performance 
       Timeline  
Endeavour Mining PLC 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Endeavour Mining PLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Endeavour Mining may actually be approaching a critical reversion point that can send shares even higher in August 2025.
Applied Materials 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Applied Materials are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Applied Materials reported solid returns over the last few months and may actually be approaching a breakup point.

Endeavour Mining and Applied Materials Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Endeavour Mining and Applied Materials

The main advantage of trading using opposite Endeavour Mining and Applied Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endeavour Mining position performs unexpectedly, Applied Materials 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 Applied Materials will offset losses from the drop in Applied Materials' long position.
The idea behind Endeavour Mining PLC and Applied Materials 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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