Correlation Between Eni SPA and Sachem Capital
Can any of the company-specific risk be diversified away by investing in both Eni SPA and Sachem Capital 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 Sachem Capital 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 Sachem Capital Corp, you can compare the effects of market volatilities on Eni SPA and Sachem Capital 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 Sachem Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eni SPA and Sachem Capital.
Diversification Opportunities for Eni SPA and Sachem Capital
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eni and Sachem is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Eni SpA ADR and Sachem Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sachem Capital Corp 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 Sachem Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sachem Capital Corp has no effect on the direction of Eni SPA i.e., Eni SPA and Sachem Capital go up and down completely randomly.
Pair Corralation between Eni SPA and Sachem Capital
Taking into account the 90-day investment horizon Eni SpA ADR is expected to under-perform the Sachem Capital. In addition to that, Eni SPA is 9.84 times more volatile than Sachem Capital Corp. It trades about -0.24 of its total potential returns per unit of risk. Sachem Capital Corp is currently generating about 0.05 per unit of volatility. If you would invest 2,506 in Sachem Capital Corp on September 1, 2024 and sell it today you would earn a total of 3.00 from holding Sachem Capital Corp or generate 0.12% 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. Sachem Capital Corp
Performance |
| Timeline |
| Eni SpA ADR |
| Sachem Capital Corp |
Eni SPA and Sachem Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eni SPA and Sachem Capital
The main advantage of trading using opposite Eni SPA and Sachem Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eni SPA position performs unexpectedly, Sachem Capital 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 Sachem Capital will offset losses from the drop in Sachem Capital'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 |
| Sachem Capital vs. Sachem Capital Corp | Sachem Capital vs. Eagle Point Credit | Sachem Capital vs. B Riley Financial |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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