Correlation Between Endeavour Mining and Telecom Italia

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

By analyzing existing cross correlation between Endeavour Mining Corp and Telecom Italia SpA, you can compare the effects of market volatilities on Endeavour Mining and Telecom Italia 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 Telecom Italia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavour Mining and Telecom Italia.

Diversification Opportunities for Endeavour Mining and Telecom Italia

0.5

Correlation Coefficient

Endeavour Mining  Telecom Italia

Very weak diversification

The 3 months correlation between Endeavour and Telecom is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining Corp and Telecom Italia SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecom Italia SpA 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 Corp are associated (or correlated) with Telecom Italia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecom Italia SpA has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and Telecom Italia go up and down completely randomly.

Pair Corralation between Endeavour Mining and Telecom Italia

Assuming the 90 days trading horizon Endeavour Mining is expected to generate 5.81 times less return on investment than Telecom Italia. In addition to that, Endeavour Mining is 1.31 times more volatile than Telecom Italia SpA. It trades about 0.02 of its total potential returns per unit of risk. Telecom Italia SpA is currently generating about 0.17 per unit of volatility. If you would invest  38.00  in Telecom Italia SpA on April 21, 2025 and sell it today you would earn a total of  8.00  from holding Telecom Italia SpA or generate 21.05% return on investment over 90 days.

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

Endeavour Mining Corp  vs.  Telecom Italia SpA

Endeavour Mining Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Endeavour Mining Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Endeavour Mining is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Telecom Italia SpA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Telecom Italia SpA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Telecom Italia unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Endeavour Mining and Telecom Italia

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

The idea behind Endeavour Mining Corp and Telecom Italia SpA 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.