Correlation Between Eni SPA and Petrus Resources
Can any of the company-specific risk be diversified away by investing in both Eni SPA and Petrus Resources 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 Petrus Resources 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 Petrus Resources, you can compare the effects of market volatilities on Eni SPA and Petrus Resources 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 Petrus Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eni SPA and Petrus Resources.
Diversification Opportunities for Eni SPA and Petrus Resources
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eni and Petrus is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Eni SpA ADR and Petrus Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrus Resources 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 Petrus Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrus Resources has no effect on the direction of Eni SPA i.e., Eni SPA and Petrus Resources go up and down completely randomly.
Pair Corralation between Eni SPA and Petrus Resources
Taking into account the 90-day investment horizon Eni SpA ADR is expected to under-perform the Petrus Resources. But the stock apears to be less risky and, when comparing its historical volatility, Eni SpA ADR is 1.23 times less risky than Petrus Resources. The stock trades about -0.18 of its potential returns per unit of risk. The Petrus Resources is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 104.00 in Petrus Resources on August 25, 2024 and sell it today you would lose (1.00) from holding Petrus Resources or give up 0.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Eni SpA ADR vs. Petrus Resources
Performance |
| Timeline |
| Eni SpA ADR |
| Petrus Resources |
Eni SPA and Petrus Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eni SPA and Petrus Resources
The main advantage of trading using opposite Eni SPA and Petrus Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eni SPA position performs unexpectedly, Petrus Resources 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 Petrus Resources will offset losses from the drop in Petrus Resources' 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 |
| Petrus Resources vs. Petroleo Brasileiro Petrobras | Petrus Resources vs. Equinor ASA ADR | Petrus Resources vs. Eni SpA ADR | Petrus Resources 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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