Correlation Between Eni SPA and Enbridge Pref
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By analyzing existing cross correlation between Enterprise Group and Enbridge Pref 5, you can compare the effects of market volatilities on Eni SPA and Enbridge Pref 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 Enbridge Pref. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eni SPA and Enbridge Pref.
Diversification Opportunities for Eni SPA and Enbridge Pref
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Eni and Enbridge is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Enterprise Group and Enbridge Pref 5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge Pref 5 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 Enterprise Group are associated (or correlated) with Enbridge Pref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge Pref 5 has no effect on the direction of Eni SPA i.e., Eni SPA and Enbridge Pref go up and down completely randomly.
Pair Corralation between Eni SPA and Enbridge Pref
Given the investment horizon of 90 days Enterprise Group is expected to generate 8.31 times more return on investment than Enbridge Pref. However, Eni SPA is 8.31 times more volatile than Enbridge Pref 5. It trades about 0.15 of its potential returns per unit of risk. Enbridge Pref 5 is currently generating about 0.12 per unit of risk. If you would invest 13.00 in Enterprise Group on September 12, 2024 and sell it today you would earn a total of 178.00 from holding Enterprise Group or generate 1369.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.29% |
| Values | Daily Returns |
Enterprise Group vs. Enbridge Pref 5
Performance |
| Timeline |
| Enterprise Group |
| Enbridge Pref 5 |
Eni SPA and Enbridge Pref Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eni SPA and Enbridge Pref
The main advantage of trading using opposite Eni SPA and Enbridge Pref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eni SPA position performs unexpectedly, Enbridge Pref 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 Enbridge Pref will offset losses from the drop in Enbridge Pref's long position.| Eni SPA vs. Enbridge Pref 5 | Eni SPA vs. Enbridge Pref 11 | Eni SPA vs. Enbridge Pref L | Eni SPA vs. E Split Corp |
| Enbridge Pref vs. Enbridge Pref 11 | Enbridge Pref vs. Enbridge Pref L | Enbridge Pref vs. E Split Corp | Enbridge Pref vs. E Split Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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