Correlation Between Eni SPA and Strattner Financial
Can any of the company-specific risk be diversified away by investing in both Eni SPA and Strattner Financial 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 Strattner Financial 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 Strattner Financial Group, you can compare the effects of market volatilities on Eni SPA and Strattner Financial 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 Strattner Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eni SPA and Strattner Financial.
Diversification Opportunities for Eni SPA and Strattner Financial
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eni and Strattner is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Eni SpA ADR and Strattner Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strattner Financial 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 Strattner Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strattner Financial has no effect on the direction of Eni SPA i.e., Eni SPA and Strattner Financial go up and down completely randomly.
Pair Corralation between Eni SPA and Strattner Financial
Taking into account the 90-day investment horizon Eni SpA ADR is expected to under-perform the Strattner Financial. But the stock apears to be less risky and, when comparing its historical volatility, Eni SpA ADR is 76.25 times less risky than Strattner Financial. The stock trades about -0.03 of its potential returns per unit of risk. The Strattner Financial Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.02 in Strattner Financial Group on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Strattner Financial Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eni SpA ADR vs. Strattner Financial Group
Performance |
| Timeline |
| Eni SpA ADR |
| Strattner Financial |
Eni SPA and Strattner Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eni SPA and Strattner Financial
The main advantage of trading using opposite Eni SPA and Strattner Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eni SPA position performs unexpectedly, Strattner Financial 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 Strattner Financial will offset losses from the drop in Strattner Financial'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 |
| Strattner Financial vs. Seadrill Limited | Strattner Financial vs. Noble plc | Strattner Financial vs. Borr Drilling | Strattner Financial vs. SCOR PK |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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