Correlation Between Hollywood Bowl and Endo International

Can any of the company-specific risk be diversified away by investing in both Hollywood Bowl and Endo International 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 Hollywood Bowl and Endo International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hollywood Bowl Group and Endo International PLC, you can compare the effects of market volatilities on Hollywood Bowl and Endo International 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 Hollywood Bowl with a short position of Endo International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollywood Bowl and Endo International.

Diversification Opportunities for Hollywood Bowl and Endo International

0.18

Correlation Coefficient

Hollywood Bowl  Endo International

Average diversification

The 3 months correlation between Hollywood and Endo is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Hollywood Bowl Group and Endo International PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endo International PLC and Hollywood Bowl 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 Hollywood Bowl Group are associated (or correlated) with Endo International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endo International PLC has no effect on the direction of Hollywood Bowl i.e., Hollywood Bowl and Endo International go up and down completely randomly.

Pair Corralation between Hollywood Bowl and Endo International

Assuming the 90 days trading horizon Hollywood Bowl is expected to generate 84.43 times less return on investment than Endo International. But when comparing it to its historical volatility, Hollywood Bowl Group is 39.31 times less risky than Endo International. It trades about 0.04 of its potential returns per unit of risk. Endo International PLC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  9.02  in Endo International PLC on October 4, 2024 and sell it today you would earn a total of  60,640  from holding Endo International PLC or generate 672283.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	51.4%
Values	Daily Returns

Hollywood Bowl Group  vs.  Endo International PLC

Hollywood Bowl Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Hollywood Bowl and Endo International

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

The idea behind Hollywood Bowl Group and Endo International 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.