Correlation Between Golden Entertainment and Endeavour Mining

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

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

Diversification Opportunities for Golden Entertainment and Endeavour Mining

0.05

Correlation Coefficient

Golden Entertainment  Endeavour Mining

Significant diversification

The 3 months correlation between Golden and Endeavour is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Golden Entertainment and Endeavour Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endeavour Mining PLC and Golden Entertainment 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 Golden Entertainment are associated (or correlated) with Endeavour Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endeavour Mining PLC has no effect on the direction of Golden Entertainment i.e., Golden Entertainment and Endeavour Mining go up and down completely randomly.

Pair Corralation between Golden Entertainment and Endeavour Mining

Assuming the 90 days horizon Golden Entertainment is expected to generate 0.94 times more return on investment than Endeavour Mining. However, Golden Entertainment is 1.07 times less risky than Endeavour Mining. It trades about 0.11 of its potential returns per unit of risk. Endeavour Mining PLC is currently generating about 0.01 per unit of risk. If you would invest  2,162  in Golden Entertainment on April 20, 2025 and sell it today you would earn a total of  318.00  from holding Golden Entertainment or generate 14.71% return on investment over 90 days.

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

Golden Entertainment  vs.  Endeavour Mining PLC

Golden Entertainment

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Entertainment are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Golden Entertainment reported solid returns over the last few months and may actually be approaching a breakup point.

Endeavour Mining PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Endeavour Mining PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Endeavour Mining is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Golden Entertainment and Endeavour Mining

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

The idea behind Golden Entertainment and Endeavour Mining 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.

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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.