Correlation Between Eni SPA and Eni SpA
Can any of the company-specific risk be diversified away by investing in both Eni SPA and Eni SpA 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 Eni SPA and Eni SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eni SpA ADR and Eni SpA, you can compare the effects of market volatilities on Eni SPA and Eni SpA 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 Eni SPA with a short position of Eni SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eni SPA and Eni SpA.
Diversification Opportunities for Eni SPA and Eni SpA
Weak diversification
The 3 months correlation between Eni and Eni is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Eni SpA ADR and Eni SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eni SpA and Eni SPA 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 Eni SpA ADR are associated (or correlated) with Eni SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eni SpA has no effect on the direction of Eni SPA i.e., Eni SPA and Eni SpA go up and down completely randomly.
Pair Corralation between Eni SPA and Eni SpA
Taking into account the 90-day investment horizon Eni SPA is expected to generate 2.34 times less return on investment than Eni SpA. But when comparing it to its historical volatility, Eni SpA ADR is 3.79 times less risky than Eni SpA. It trades about 0.05 of its potential returns per unit of risk. Eni SpA is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,379 in Eni SpA on January 26, 2024 and sell it today you would earn a total of 129.00 from holding Eni SpA or generate 9.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eni SpA ADR vs. Eni SpA
Performance |
| Timeline |
| Eni SpA ADR |
| Eni SpA |
Eni SPA and Eni SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eni SPA and Eni SpA
The main advantage of trading using opposite Eni SPA and Eni SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eni SPA position performs unexpectedly, Eni SpA 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 Eni SpA will offset losses from the drop in Eni SpA's long position.| Eni SPA vs. TotalEnergies SE ADR | Eni SPA vs. Ecopetrol SA ADR | Eni SPA vs. Shell PLC ADR | Eni SPA vs. Petroleo Brasileiro Petrobras |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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