Correlation Between Eni SPA and CanAlaska Uranium
Can any of the company-specific risk be diversified away by investing in both Eni SPA and CanAlaska Uranium 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 CanAlaska Uranium 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 CanAlaska Uranium, you can compare the effects of market volatilities on Eni SPA and CanAlaska Uranium 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 CanAlaska Uranium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eni SPA and CanAlaska Uranium.
Diversification Opportunities for Eni SPA and CanAlaska Uranium
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eni and CanAlaska is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Eni SpA ADR and CanAlaska Uranium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CanAlaska Uranium 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 CanAlaska Uranium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CanAlaska Uranium has no effect on the direction of Eni SPA i.e., Eni SPA and CanAlaska Uranium go up and down completely randomly.
Pair Corralation between Eni SPA and CanAlaska Uranium
Taking into account the 90-day investment horizon Eni SpA ADR is expected to under-perform the CanAlaska Uranium. But the stock apears to be less risky and, when comparing its historical volatility, Eni SpA ADR is 2.33 times less risky than CanAlaska Uranium. The stock trades about -0.24 of its potential returns per unit of risk. The CanAlaska Uranium is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 54.00 in CanAlaska Uranium on August 28, 2024 and sell it today you would earn a total of 1.00 from holding CanAlaska Uranium or generate 1.85% 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. CanAlaska Uranium
Performance |
| Timeline |
| Eni SpA ADR |
| CanAlaska Uranium |
Eni SPA and CanAlaska Uranium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eni SPA and CanAlaska Uranium
The main advantage of trading using opposite Eni SPA and CanAlaska Uranium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eni SPA position performs unexpectedly, CanAlaska Uranium 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 CanAlaska Uranium will offset losses from the drop in CanAlaska Uranium'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 |
| CanAlaska Uranium vs. Forum Energy Metals | CanAlaska Uranium vs. Namibia Critical Metals | CanAlaska Uranium vs. Themac Resources Group | CanAlaska Uranium vs. Pasinex Resources Limited |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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