Correlation Between Endo International and National Atomic

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

Diversification Opportunities for Endo International and National Atomic

-0.1

Correlation Coefficient

Endo International  National Atomic

Good diversification

The 3 months correlation between Endo and National is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Endo International PLC and National Atomic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Atomic 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 National Atomic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Atomic has no effect on the direction of Endo International i.e., Endo International and National Atomic go up and down completely randomly.

Pair Corralation between Endo International and National Atomic

Assuming the 90 days trading horizon Endo International PLC is expected to generate 29.67 times more return on investment than National Atomic. However, Endo International is 29.67 times more volatile than National Atomic Co. It trades about 0.08 of its potential returns per unit of risk. National Atomic Co is currently generating about 0.02 per unit of risk. If you would invest  0.52  in Endo International PLC on November 28, 2024 and sell it today you would earn a total of  68,020  from holding Endo International PLC or generate 1.308086154E7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	73.11%
Values	Daily Returns

Endo International PLC  vs.  National Atomic Co

Endo International PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Endo International PLC are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Endo International may actually be approaching a critical reversion point that can send shares even higher in March 2025.

National Atomic

Risk-Adjusted Performance

Very Weak

Over the last 90 days National Atomic Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Endo International and National Atomic

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

The idea behind Endo International PLC and National Atomic Co 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.