Correlation Between Eni SPA and Blue Water
Can any of the company-specific risk be diversified away by investing in both Eni SPA and Blue Water 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 Blue Water 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 Blue Water Petroleum, you can compare the effects of market volatilities on Eni SPA and Blue Water 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 Blue Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eni SPA and Blue Water.
Diversification Opportunities for Eni SPA and Blue Water
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eni and Blue is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Eni SpA ADR and Blue Water Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Water Petroleum 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 Blue Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Water Petroleum has no effect on the direction of Eni SPA i.e., Eni SPA and Blue Water go up and down completely randomly.
Pair Corralation between Eni SPA and Blue Water
Taking into account the 90-day investment horizon Eni SpA ADR is expected to generate 0.1 times more return on investment than Blue Water. However, Eni SpA ADR is 10.47 times less risky than Blue Water. It trades about -0.02 of its potential returns per unit of risk. Blue Water Petroleum is currently generating about -0.04 per unit of risk. If you would invest 2,989 in Eni SpA ADR on August 29, 2024 and sell it today you would lose (177.00) from holding Eni SpA ADR or give up 5.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eni SpA ADR vs. Blue Water Petroleum
Performance |
| Timeline |
| Eni SpA ADR |
| Blue Water Petroleum |
Eni SPA and Blue Water Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eni SPA and Blue Water
The main advantage of trading using opposite Eni SPA and Blue Water positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eni SPA position performs unexpectedly, Blue Water 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 Blue Water will offset losses from the drop in Blue Water'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 |
| Blue Water vs. BluMetric Environmental | Blue Water vs. BQE Water | Blue Water vs. Houston Natural Resources | Blue Water vs. JPX Global |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |