Correlation Between XLMedia PLC and Endo International

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

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

Diversification Opportunities for XLMedia PLC and Endo International

-0.18

Correlation Coefficient

XLMedia PLC  Endo International

Good diversification

The 3 months correlation between XLMedia and Endo is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding XLMedia PLC 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 XLMedia PLC 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 XLMedia PLC 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 XLMedia PLC i.e., XLMedia PLC and Endo International go up and down completely randomly.

Pair Corralation between XLMedia PLC and Endo International

Assuming the 90 days trading horizon XLMedia PLC is expected to under-perform the Endo International. But the stock apears to be less risky and, when comparing its historical volatility, XLMedia PLC is 11.47 times less risky than Endo International. The stock trades about 0.0 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  9.00  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 662477.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	51.5%
Values	Daily Returns

XLMedia PLC  vs.  Endo International PLC

XLMedia PLC

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 XLMedia PLC and Endo International

The main advantage of trading using opposite XLMedia PLC and Endo International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XLMedia PLC 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 XLMedia PLC 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.