Correlation Between Eni SPA and Crossamerica Partners
Can any of the company-specific risk be diversified away by investing in both Eni SPA and Crossamerica Partners 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 Crossamerica Partners 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 Crossamerica Partners LP, you can compare the effects of market volatilities on Eni SPA and Crossamerica Partners 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 Crossamerica Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eni SPA and Crossamerica Partners.
Diversification Opportunities for Eni SPA and Crossamerica Partners
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eni and Crossamerica is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Eni SpA ADR and Crossamerica Partners LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crossamerica Partners 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 Crossamerica Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crossamerica Partners has no effect on the direction of Eni SPA i.e., Eni SPA and Crossamerica Partners go up and down completely randomly.
Pair Corralation between Eni SPA and Crossamerica Partners
Taking into account the 90-day investment horizon Eni SPA is expected to generate 2.07 times less return on investment than Crossamerica Partners. But when comparing it to its historical volatility, Eni SpA ADR is 1.2 times less risky than Crossamerica Partners. It trades about 0.1 of its potential returns per unit of risk. Crossamerica Partners LP is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,151 in Crossamerica Partners LP on November 9, 2024 and sell it today you would earn a total of 88.00 from holding Crossamerica Partners LP or generate 4.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eni SpA ADR vs. Crossamerica Partners LP
Performance |
| Timeline |
| Eni SpA ADR |
| Crossamerica Partners |
Eni SPA and Crossamerica Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eni SPA and Crossamerica Partners
The main advantage of trading using opposite Eni SPA and Crossamerica Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eni SPA position performs unexpectedly, Crossamerica Partners 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 Crossamerica Partners will offset losses from the drop in Crossamerica Partners' 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 |
| Crossamerica Partners vs. Delek Energy | Crossamerica Partners vs. Sunoco LP | Crossamerica Partners vs. CVR Energy | Crossamerica Partners vs. Phillips 66 |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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