Correlation Between AMG Advanced and Endo International
Can any of the company-specific risk be diversified away by investing in both AMG Advanced 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 AMG Advanced and Endo International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMG Advanced Metallurgical and Endo International PLC, you can compare the effects of market volatilities on AMG Advanced 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 AMG Advanced with a short position of Endo International. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Endo International.
Diversification Opportunities for AMG Advanced and Endo International
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AMG and Endo is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical 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 AMG Advanced 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 AMG Advanced Metallurgical 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 AMG Advanced i.e., AMG Advanced and Endo International go up and down completely randomly.
Pair Corralation between AMG Advanced and Endo International
Assuming the 90 days trading horizon AMG Advanced Metallurgical is expected to under-perform the Endo International. In addition to that, AMG Advanced is 2.53 times more volatile than Endo International PLC. It trades about -0.22 of its total potential returns per unit of risk. Endo International PLC is currently generating about -0.03 per unit of volatility. If you would invest 62,930 in Endo International PLC on September 18, 2024 and sell it today you would lose (373.00) from holding Endo International PLC or give up 0.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. Endo International PLC
Performance |
| Timeline |
| AMG Advanced Metallu |
| Endo International PLC |
AMG Advanced and Endo International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and Endo International
The main advantage of trading using opposite AMG Advanced and Endo International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced 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.| AMG Advanced vs. Samsung Electronics Co | AMG Advanced vs. Samsung Electronics Co | AMG Advanced vs. Hyundai Motor | AMG Advanced vs. Reliance Industries Ltd |
| Endo International vs. Melia Hotels | Endo International vs. AMG Advanced Metallurgical | Endo International vs. GreenX Metals | Endo International vs. LPKF Laser Electronics |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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