Correlation Between Premier African and Endo International

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

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

Diversification Opportunities for Premier African and Endo International

-0.19

Correlation Coefficient

Premier African  Endo International

Good diversification

The 3 months correlation between Premier and Endo is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Premier African Minerals 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 Premier African 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 Premier African Minerals 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 Premier African i.e., Premier African and Endo International go up and down completely randomly.

Pair Corralation between Premier African and Endo International

Assuming the 90 days trading horizon Premier African Minerals is expected to under-perform the Endo International. But the stock apears to be less risky and, when comparing its historical volatility, Premier African Minerals is 8.42 times less risky than Endo International. The stock trades about -0.02 of its potential returns per unit of risk. The Endo International PLC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  8.60  in Endo International PLC on September 29, 2024 and sell it today you would earn a total of  59,623  from holding Endo International PLC or generate 693295.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	51.36%
Values	Daily Returns

Premier African Minerals  vs.  Endo International PLC

Premier African Minerals

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Premier African Minerals are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Premier African unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Premier African and Endo International

The main advantage of trading using opposite Premier African and Endo International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier African 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 Premier African Minerals 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.