Correlation Between Enogia SAS and Esso SAF
Can any of the company-specific risk be diversified away by investing in both Enogia SAS and Esso SAF 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 Enogia SAS and Esso SAF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enogia SAS and Esso SAF, you can compare the effects of market volatilities on Enogia SAS and Esso SAF 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 Enogia SAS with a short position of Esso SAF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enogia SAS and Esso SAF.
Diversification Opportunities for Enogia SAS and Esso SAF
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enogia and Esso is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Enogia SAS and Esso SAF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esso SAF and Enogia SAS 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 Enogia SAS are associated (or correlated) with Esso SAF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esso SAF has no effect on the direction of Enogia SAS i.e., Enogia SAS and Esso SAF go up and down completely randomly.
Pair Corralation between Enogia SAS and Esso SAF
Assuming the 90 days trading horizon Enogia SAS is expected to under-perform the Esso SAF. But the stock apears to be less risky and, when comparing its historical volatility, Enogia SAS is 2.23 times less risky than Esso SAF. The stock trades about -0.37 of its potential returns per unit of risk. The Esso SAF is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 10,560 in Esso SAF on August 30, 2024 and sell it today you would lose (560.00) from holding Esso SAF or give up 5.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enogia SAS vs. Esso SAF
Performance |
| Timeline |
| Enogia SAS |
| Esso SAF |
Enogia SAS and Esso SAF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enogia SAS and Esso SAF
The main advantage of trading using opposite Enogia SAS and Esso SAF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enogia SAS position performs unexpectedly, Esso SAF 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 Esso SAF will offset losses from the drop in Esso SAF's long position.| Enogia SAS vs. LVMH Mot Hennessy | Enogia SAS vs. LOreal SA | Enogia SAS vs. Hermes International SCA | Enogia SAS vs. Manitou BF SA |
| Esso SAF vs. Etablissements Maurel et | Esso SAF vs. Eramet SA | Esso SAF vs. Socit BIC SA | Esso SAF vs. TotalEnergies EP Gabon |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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