Correlation Between Eni SPA and Exxon
Can any of the company-specific risk be diversified away by investing in both Eni SPA and Exxon 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 Exxon 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 Exxon Mobil Corp, you can compare the effects of market volatilities on Eni SPA and Exxon 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 Exxon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eni SPA and Exxon.
Diversification Opportunities for Eni SPA and Exxon
Pay attention - limited upside
The 3 months correlation between Eni and Exxon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eni SpA ADR and Exxon Mobil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exxon Mobil 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 Exxon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exxon Mobil Corp has no effect on the direction of Eni SPA i.e., Eni SPA and Exxon go up and down completely randomly.
Pair Corralation between Eni SPA and Exxon
Taking into account the 90-day investment horizon Eni SPA is expected to generate 1.45 times less return on investment than Exxon. But when comparing it to its historical volatility, Eni SpA ADR is 1.1 times less risky than Exxon. It trades about 0.03 of its potential returns per unit of risk. Exxon Mobil Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 10,283 in Exxon Mobil Corp on August 31, 2024 and sell it today you would earn a total of 1,513 from holding Exxon Mobil Corp or generate 14.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eni SpA ADR vs. Exxon Mobil Corp
Performance |
| Timeline |
| Eni SpA ADR |
| Exxon Mobil Corp |
Eni SPA and Exxon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eni SPA and Exxon
The main advantage of trading using opposite Eni SPA and Exxon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eni SPA position performs unexpectedly, Exxon 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 Exxon will offset losses from the drop in Exxon'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 |
| Exxon vs. RLJ Lodging Trust | Exxon vs. Aquagold International | Exxon vs. Stepstone Group | Exxon vs. Morningstar Unconstrained Allocation |
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.
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