Correlation Between Eni SPA and Par Pacific
Can any of the company-specific risk be diversified away by investing in both Eni SPA and Par Pacific 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 Par Pacific 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 Par Pacific Holdings, you can compare the effects of market volatilities on Eni SPA and Par Pacific 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 Par Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eni SPA and Par Pacific.
Diversification Opportunities for Eni SPA and Par Pacific
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eni and Par is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Eni SpA ADR and Par Pacific Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Par Pacific Holdings 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 Par Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Par Pacific Holdings has no effect on the direction of Eni SPA i.e., Eni SPA and Par Pacific go up and down completely randomly.
Pair Corralation between Eni SPA and Par Pacific
Taking into account the 90-day investment horizon Eni SpA ADR is expected to generate 0.54 times more return on investment than Par Pacific. However, Eni SpA ADR is 1.84 times less risky than Par Pacific. It trades about 0.03 of its potential returns per unit of risk. Par Pacific Holdings is currently generating about 0.0 per unit of risk. If you would invest 2,486 in Eni SpA ADR on August 27, 2024 and sell it today you would earn a total of 415.00 from holding Eni SpA ADR or generate 16.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eni SpA ADR vs. Par Pacific Holdings
Performance |
| Timeline |
| Eni SpA ADR |
| Par Pacific Holdings |
Eni SPA and Par Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eni SPA and Par Pacific
The main advantage of trading using opposite Eni SPA and Par Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eni SPA position performs unexpectedly, Par Pacific 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 Par Pacific will offset losses from the drop in Par Pacific'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 |
| Par Pacific vs. Delek Logistics Partners | Par Pacific vs. CVR Energy | Par Pacific vs. PBF Energy | Par Pacific vs. HF Sinclair Corp |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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