Correlation Between Endeavour Mining and Capital Metals

Can any of the company-specific risk be diversified away by investing in both Endeavour Mining and Capital Metals 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 Capital Metals 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 Capital Metals PLC, you can compare the effects of market volatilities on Endeavour Mining and Capital Metals 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 Capital Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavour Mining and Capital Metals.

Diversification Opportunities for Endeavour Mining and Capital Metals

0.58

Correlation Coefficient

Endeavour Mining  Capital Metals

Very weak diversification

The 3 months correlation between Endeavour and Capital is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining Corp and Capital Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Metals PLC 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 Capital Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Metals PLC has no effect on the direction of Endeavour Mining i.e., Endeavour Mining and Capital Metals go up and down completely randomly.

Pair Corralation between Endeavour Mining and Capital Metals

Assuming the 90 days trading horizon Endeavour Mining is expected to generate 1.17 times less return on investment than Capital Metals. But when comparing it to its historical volatility, Endeavour Mining Corp is 1.64 times less risky than Capital Metals. It trades about 0.09 of its potential returns per unit of risk. Capital Metals PLC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  270.00  in Capital Metals PLC on April 24, 2025 and sell it today you would earn a total of  35.00  from holding Capital Metals PLC or generate 12.96% 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.  Capital Metals PLC

Endeavour Mining Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Endeavour Mining Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Endeavour Mining exhibited solid returns over the last few months and may actually be approaching a breakup point.

Capital Metals PLC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Capital Metals PLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Capital Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Endeavour Mining and Capital Metals

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

The idea behind Endeavour Mining Corp and Capital Metals PLC 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.