Correlation Between Akebono Brake and Eni SpA
Can any of the company-specific risk be diversified away by investing in both Akebono Brake 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 Akebono Brake and Eni SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akebono Brake Industry and Eni SpA, you can compare the effects of market volatilities on Akebono Brake 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 Akebono Brake with a short position of Eni SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akebono Brake and Eni SpA.
Diversification Opportunities for Akebono Brake and Eni SpA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Akebono and Eni is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Akebono Brake Industry and Eni SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eni SpA and Akebono Brake 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 Akebono Brake Industry 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 Akebono Brake i.e., Akebono Brake and Eni SpA go up and down completely randomly.
Pair Corralation between Akebono Brake and Eni SpA
Assuming the 90 days horizon Akebono Brake Industry is expected to under-perform the Eni SpA. But the pink sheet apears to be less risky and, when comparing its historical volatility, Akebono Brake Industry is 3.81 times less risky than Eni SpA. The pink sheet trades about -0.08 of its potential returns per unit of risk. The Eni SpA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,013 in Eni SpA on January 25, 2024 and sell it today you would earn a total of 495.00 from holding Eni SpA or generate 48.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 90.09% |
| Values | Daily Returns |
Akebono Brake Industry vs. Eni SpA
Performance |
| Timeline |
| Akebono Brake Industry |
| Eni SpA |
Akebono Brake and Eni SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akebono Brake and Eni SpA
The main advantage of trading using opposite Akebono Brake and Eni SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akebono Brake 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.| Akebono Brake vs. Allison Transmission Holdings | Akebono Brake vs. Luminar Technologies | Akebono Brake vs. Lear Corporation | Akebono Brake vs. BorgWarner |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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