Correlation Between CWC Energy and Saipem SpA
Can any of the company-specific risk be diversified away by investing in both CWC Energy and Saipem 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 CWC Energy and Saipem SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CWC Energy Services and Saipem SpA, you can compare the effects of market volatilities on CWC Energy and Saipem 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 CWC Energy with a short position of Saipem SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CWC Energy and Saipem SpA.
Diversification Opportunities for CWC Energy and Saipem SpA
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CWC and Saipem is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding CWC Energy Services and Saipem SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saipem SpA and CWC Energy 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 CWC Energy Services are associated (or correlated) with Saipem SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saipem SpA has no effect on the direction of CWC Energy i.e., CWC Energy and Saipem SpA go up and down completely randomly.
Pair Corralation between CWC Energy and Saipem SpA
If you would invest 223.00 in Saipem SpA on August 31, 2024 and sell it today you would earn a total of 33.00 from holding Saipem SpA or generate 14.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
CWC Energy Services vs. Saipem SpA
Performance |
| Timeline |
| CWC Energy Services |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Saipem SpA |
CWC Energy and Saipem SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CWC Energy and Saipem SpA
The main advantage of trading using opposite CWC Energy and Saipem SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CWC Energy position performs unexpectedly, Saipem 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 Saipem SpA will offset losses from the drop in Saipem SpA's long position.| CWC Energy vs. Petrofac Ltd ADR | CWC Energy vs. Saipem SpA | CWC Energy vs. SMG Industries | CWC Energy vs. Worley Parsons |
| Saipem SpA vs. Expro Group Holdings | Saipem SpA vs. ChampionX | Saipem SpA vs. Ranger Energy Services | Saipem SpA vs. Cactus Inc |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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