Correlation Between Clear Channel and Endeavor Group

Can any of the company-specific risk be diversified away by investing in both Clear Channel and Endeavor Group 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 Clear Channel and Endeavor Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Clear Channel Outdoor and Endeavor Group Holdings, you can compare the effects of market volatilities on Clear Channel and Endeavor Group 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 Clear Channel with a short position of Endeavor Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clear Channel and Endeavor Group.

Diversification Opportunities for Clear Channel and Endeavor Group

-0.62

Correlation Coefficient

Clear Channel  Endeavor Group

Excellent diversification

The 3 months correlation between Clear and Endeavor is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Clear Channel Outdoor and Endeavor Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endeavor Group Holdings and Clear Channel 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 Clear Channel Outdoor are associated (or correlated) with Endeavor Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endeavor Group Holdings has no effect on the direction of Clear Channel i.e., Clear Channel and Endeavor Group go up and down completely randomly.

Pair Corralation between Clear Channel and Endeavor Group

Considering the 90-day investment horizon Clear Channel Outdoor is expected to under-perform the Endeavor Group. In addition to that, Clear Channel is 5.77 times more volatile than Endeavor Group Holdings. It trades about -0.13 of its total potential returns per unit of risk. Endeavor Group Holdings is currently generating about 0.42 per unit of volatility. If you would invest  2,883  in Endeavor Group Holdings on September 25, 2024 and sell it today you would earn a total of  241.00  from holding Endeavor Group Holdings or generate 8.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Clear Channel Outdoor  vs.  Endeavor Group Holdings

Clear Channel Outdoor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clear Channel Outdoor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Endeavor Group Holdings

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Endeavor Group Holdings are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal fundamental indicators, Endeavor Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Clear Channel and Endeavor Group

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

The idea behind Clear Channel Outdoor and Endeavor Group Holdings 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.