Correlation Between Endo International and LBG Media

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

Diversification Opportunities for Endo International and LBG Media

-0.89

Correlation Coefficient

Endo International  LBG Media

Pay attention - limited upside

The 3 months correlation between Endo and LBG is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Endo International PLC and LBG Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LBG Media PLC 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 LBG Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LBG Media PLC has no effect on the direction of Endo International i.e., Endo International and LBG Media go up and down completely randomly.

Pair Corralation between Endo International and LBG Media

Assuming the 90 days trading horizon Endo International PLC is expected to generate 0.43 times more return on investment than LBG Media. However, Endo International PLC is 2.34 times less risky than LBG Media. It trades about 0.32 of its potential returns per unit of risk. LBG Media PLC is currently generating about -0.12 per unit of risk. If you would invest  59,763  in Endo International PLC on December 21, 2024 and sell it today you would earn a total of  13,694  from holding Endo International PLC or generate 22.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Endo International PLC  vs.  LBG Media PLC

Endo International PLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Endo International PLC are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Endo International unveiled solid returns over the last few months and may actually be approaching a breakup point.

LBG Media PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days LBG Media PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Endo International and LBG Media

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

The idea behind Endo International PLC and LBG Media 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.