Correlation Between Bath Body and Endo International
Can any of the company-specific risk be diversified away by investing in both Bath Body 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 Bath Body and Endo International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bath Body Works and Endo International PLC, you can compare the effects of market volatilities on Bath Body 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 Bath Body with a short position of Endo International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bath Body and Endo International.
Diversification Opportunities for Bath Body and Endo International
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bath and Endo is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bath Body Works 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 Bath Body 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 Bath Body Works 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 Bath Body i.e., Bath Body and Endo International go up and down completely randomly.
Pair Corralation between Bath Body and Endo International
Assuming the 90 days trading horizon Bath Body Works is expected to generate 3.04 times more return on investment than Endo International. However, Bath Body is 3.04 times more volatile than Endo International PLC. It trades about 0.17 of its potential returns per unit of risk. Endo International PLC is currently generating about -0.27 per unit of risk. If you would invest 3,590 in Bath Body Works on September 24, 2024 and sell it today you would earn a total of 352.00 from holding Bath Body Works or generate 9.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Bath Body Works vs. Endo International PLC
Performance |
| Timeline |
| Bath Body Works |
| Endo International PLC |
Bath Body and Endo International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bath Body and Endo International
The main advantage of trading using opposite Bath Body and Endo International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bath Body 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.| Bath Body vs. Uniper SE | Bath Body vs. Mulberry Group PLC | Bath Body vs. London Security Plc | Bath Body vs. Triad Group PLC |
| Endo International vs. Zoom Video Communications | Endo International vs. Enbridge | Endo International vs. Bath Body Works | Endo International vs. Rio Tinto PLC |
Check out your portfolio center.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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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