Correlation Between Endo International and HSBC ETFs

Can any of the company-specific risk be diversified away by investing in both Endo International and HSBC ETFs 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 HSBC ETFs 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 HSBC ETFs Public, you can compare the effects of market volatilities on Endo International and HSBC ETFs 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 HSBC ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endo International and HSBC ETFs.

Diversification Opportunities for Endo International and HSBC ETFs

-0.52

Correlation Coefficient

Endo International  HSBC ETFs

Excellent diversification

The 3 months correlation between Endo and HSBC is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Endo International PLC and HSBC ETFs Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HSBC ETFs Public 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 HSBC ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HSBC ETFs Public has no effect on the direction of Endo International i.e., Endo International and HSBC ETFs go up and down completely randomly.

Pair Corralation between Endo International and HSBC ETFs

Assuming the 90 days trading horizon Endo International PLC is expected to under-perform the HSBC ETFs. In addition to that, Endo International is 1.32 times more volatile than HSBC ETFs Public. It trades about -0.06 of its total potential returns per unit of risk. HSBC ETFs Public is currently generating about 0.21 per unit of volatility. If you would invest  5,317  in HSBC ETFs Public on September 4, 2024 and sell it today you would earn a total of  544.00  from holding HSBC ETFs Public or generate 10.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Endo International PLC  vs.  HSBC ETFs Public

Endo International PLC

Risk-Adjusted Performance

0 of 100

Very Weak

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

HSBC ETFs Public

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in HSBC ETFs Public are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, HSBC ETFs may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Endo International and HSBC ETFs

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

The idea behind Endo International PLC and HSBC ETFs Public 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.