Correlation Between Endo International and Meta Platforms

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

Diversification Opportunities for Endo International and Meta Platforms

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Endo and Meta is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Endo International PLC and Meta Platforms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Platforms and Endo International 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 Endo International PLC are associated (or correlated) with Meta Platforms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Platforms has no effect on the direction of Endo International i.e., Endo International and Meta Platforms go up and down completely randomly.

Pair Corralation between Endo International and Meta Platforms

If you would invest (100.00) in Endo International PLC on December 30, 2023 and sell it today you would earn a total of  100.00  from holding Endo International PLC or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Endo International PLC  vs.  Meta Platforms

 Performance 
       Timeline  
Endo International PLC 

Risk-Adjusted Performance

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Over the last 90 days Endo International PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Endo International is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.
Meta Platforms 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days Meta Platforms has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Meta Platforms is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Endo International and Meta Platforms Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Endo International and Meta Platforms

The main advantage of trading using opposite Endo International and Meta Platforms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endo International position performs unexpectedly, Meta Platforms 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 Meta Platforms will offset losses from the drop in Meta Platforms' long position.
The idea behind Endo International PLC and Meta Platforms 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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