Correlation Between Analog Devices and Endo International

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

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

Diversification Opportunities for Analog Devices and Endo International

0.89

Correlation Coefficient

Analog Devices  Endo International

Very poor diversification

The 3 months correlation between Analog and Endo is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Analog Devices 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 Analog Devices 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 Analog Devices 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 Analog Devices i.e., Analog Devices and Endo International go up and down completely randomly.

Pair Corralation between Analog Devices and Endo International

Assuming the 90 days trading horizon Analog Devices is expected to generate 2.05 times more return on investment than Endo International. However, Analog Devices is 2.05 times more volatile than Endo International PLC. It trades about 0.11 of its potential returns per unit of risk. Endo International PLC is currently generating about 0.13 per unit of risk. If you would invest  19,699  in Analog Devices on April 1, 2025 and sell it today you would earn a total of  3,987  from holding Analog Devices or generate 20.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Analog Devices  vs.  Endo International PLC

Analog Devices

Risk-Adjusted Performance

OK

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

Endo International PLC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Endo International PLC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Endo International may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with Analog Devices and Endo International

The main advantage of trading using opposite Analog Devices and Endo International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Analog Devices 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 Analog Devices 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.