Correlation Between Eni SPA and Altura Energy
Can any of the company-specific risk be diversified away by investing in both Eni SPA and Altura Energy 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 Altura Energy 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 Altura Energy, you can compare the effects of market volatilities on Eni SPA and Altura Energy 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 Altura Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eni SPA and Altura Energy.
Diversification Opportunities for Eni SPA and Altura Energy
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eni and Altura is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Eni SpA ADR and Altura Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altura Energy 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 Altura Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altura Energy has no effect on the direction of Eni SPA i.e., Eni SPA and Altura Energy go up and down completely randomly.
Pair Corralation between Eni SPA and Altura Energy
Taking into account the 90-day investment horizon Eni SpA ADR is expected to under-perform the Altura Energy. But the stock apears to be less risky and, when comparing its historical volatility, Eni SpA ADR is 5.18 times less risky than Altura Energy. The stock trades about -0.24 of its potential returns per unit of risk. The Altura Energy is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 654.00 in Altura Energy on August 29, 2024 and sell it today you would earn a total of 374.00 from holding Altura Energy or generate 57.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Eni SpA ADR vs. Altura Energy
Performance |
| Timeline |
| Eni SpA ADR |
| Altura Energy |
Eni SPA and Altura Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eni SPA and Altura Energy
The main advantage of trading using opposite Eni SPA and Altura Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eni SPA position performs unexpectedly, Altura Energy 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 Altura Energy will offset losses from the drop in Altura Energy'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 |
| Altura Energy vs. Yamaha Motor Co | Altura Energy vs. Nitto Denko Corp | Altura Energy vs. Farmers Merchants Bancorp | Altura Energy vs. Furukawa Electric Co |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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