Correlation Between Eni SPA and First Internet
Can any of the company-specific risk be diversified away by investing in both Eni SPA and First Internet 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 First Internet 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 First Internet Bancorp, you can compare the effects of market volatilities on Eni SPA and First Internet 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 First Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eni SPA and First Internet.
Diversification Opportunities for Eni SPA and First Internet
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eni and First is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Eni SpA ADR and First Internet Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Internet Bancorp 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 First Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Internet Bancorp has no effect on the direction of Eni SPA i.e., Eni SPA and First Internet go up and down completely randomly.
Pair Corralation between Eni SPA and First Internet
Taking into account the 90-day investment horizon Eni SpA ADR is expected to under-perform the First Internet. In addition to that, Eni SPA is 2.77 times more volatile than First Internet Bancorp. It trades about -0.18 of its total potential returns per unit of risk. First Internet Bancorp is currently generating about 0.19 per unit of volatility. If you would invest 2,481 in First Internet Bancorp on August 30, 2024 and sell it today you would earn a total of 43.00 from holding First Internet Bancorp or generate 1.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eni SpA ADR vs. First Internet Bancorp
Performance |
| Timeline |
| Eni SpA ADR |
| First Internet Bancorp |
Eni SPA and First Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eni SPA and First Internet
The main advantage of trading using opposite Eni SPA and First Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eni SPA position performs unexpectedly, First Internet 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 First Internet will offset losses from the drop in First Internet'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 |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |