Correlation Between Endo International and TotalEnergies

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

Diversification Opportunities for Endo International and TotalEnergies

0.55

Correlation Coefficient

Endo International  TotalEnergies

Very weak diversification

The 3 months correlation between Endo and TotalEnergies is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Endo International PLC and TotalEnergies SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TotalEnergies SE 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 TotalEnergies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TotalEnergies SE has no effect on the direction of Endo International i.e., Endo International and TotalEnergies go up and down completely randomly.

Pair Corralation between Endo International and TotalEnergies

Assuming the 90 days trading horizon Endo International PLC is expected to generate 31.81 times more return on investment than TotalEnergies. However, Endo International is 31.81 times more volatile than TotalEnergies SE. It trades about 0.08 of its potential returns per unit of risk. TotalEnergies SE is currently generating about 0.01 per unit of risk. If you would invest  0.05  in Endo International PLC on October 24, 2024 and sell it today you would earn a total of  63,542  from holding Endo International PLC or generate 1.270839E8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	81.6%
Values	Daily Returns

Endo International PLC  vs.  TotalEnergies SE

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.

TotalEnergies SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TotalEnergies SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, TotalEnergies is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Endo International and TotalEnergies

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

The idea behind Endo International PLC and TotalEnergies SE 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..