Correlation Between Paramount Global and Endeavor Group

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

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

Diversification Opportunities for Paramount Global and Endeavor Group

-0.19

Correlation Coefficient

Paramount Global  Endeavor Group

Good diversification

The 3 months correlation between Paramount and Endeavor is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Paramount Global Class 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 Paramount Global 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 Paramount Global Class 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 Paramount Global i.e., Paramount Global and Endeavor Group go up and down completely randomly.

Pair Corralation between Paramount Global and Endeavor Group

Given the investment horizon of 90 days Paramount Global Class is expected to generate 0.57 times more return on investment than Endeavor Group. However, Paramount Global Class is 1.75 times less risky than Endeavor Group. It trades about 0.12 of its potential returns per unit of risk. Endeavor Group Holdings is currently generating about -0.02 per unit of risk. If you would invest  1,030  in Paramount Global Class on December 30, 2024 and sell it today you would earn a total of  126.00  from holding Paramount Global Class or generate 12.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.94%
Values	Daily Returns

Paramount Global Class  vs.  Endeavor Group Holdings

Paramount Global Class

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Paramount Global Class are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Paramount Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Endeavor Group Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Endeavor Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Endeavor Group is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Paramount Global and Endeavor Group

The main advantage of trading using opposite Paramount Global and Endeavor Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paramount Global 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 Paramount Global Class 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.