Correlation Between Eni SPA and NXT Energy
Can any of the company-specific risk be diversified away by investing in both Eni SPA and NXT 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 NXT 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 NXT Energy Solutions, you can compare the effects of market volatilities on Eni SPA and NXT 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 NXT Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eni SPA and NXT Energy.
Diversification Opportunities for Eni SPA and NXT Energy
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eni and NXT is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Eni SpA ADR and NXT Energy Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NXT Energy Solutions 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 NXT Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NXT Energy Solutions has no effect on the direction of Eni SPA i.e., Eni SPA and NXT Energy go up and down completely randomly.
Pair Corralation between Eni SPA and NXT Energy
Taking into account the 90-day investment horizon Eni SpA ADR is expected to generate 0.08 times more return on investment than NXT Energy. However, Eni SpA ADR is 13.21 times less risky than NXT Energy. It trades about -0.06 of its potential returns per unit of risk. NXT Energy Solutions is currently generating about -0.02 per unit of risk. If you would invest 2,964 in Eni SpA ADR on August 27, 2024 and sell it today you would lose (99.00) from holding Eni SpA ADR or give up 3.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eni SpA ADR vs. NXT Energy Solutions
Performance |
| Timeline |
| Eni SpA ADR |
| NXT Energy Solutions |
Eni SPA and NXT Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eni SPA and NXT Energy
The main advantage of trading using opposite Eni SPA and NXT Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eni SPA position performs unexpectedly, NXT 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 NXT Energy will offset losses from the drop in NXT 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 |
| NXT Energy vs. Petroleo Brasileiro Petrobras | NXT Energy vs. Equinor ASA ADR | NXT Energy vs. Eni SpA ADR | NXT Energy vs. YPF Sociedad Anonima |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |