Correlation Between Enagas SA and Mediobanca Banca

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Enagas SA and Mediobanca Banca 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 Enagas SA and Mediobanca Banca into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enagas SA and Mediobanca Banca di, you can compare the effects of market volatilities on Enagas SA and Mediobanca Banca 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 Enagas SA with a short position of Mediobanca Banca. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enagas SA and Mediobanca Banca.

Diversification Opportunities for Enagas SA and Mediobanca Banca

0.79
  Correlation Coefficient

Poor diversification

The 3 months correlation between Enagas and Mediobanca is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Enagas SA and Mediobanca Banca di in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mediobanca Banca and Enagas SA 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 Enagas SA are associated (or correlated) with Mediobanca Banca. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mediobanca Banca has no effect on the direction of Enagas SA i.e., Enagas SA and Mediobanca Banca go up and down completely randomly.

Pair Corralation between Enagas SA and Mediobanca Banca

Assuming the 90 days horizon Enagas SA is expected to under-perform the Mediobanca Banca. But the pink sheet apears to be less risky and, when comparing its historical volatility, Enagas SA is 1.01 times less risky than Mediobanca Banca. The pink sheet trades about -0.01 of its potential returns per unit of risk. The Mediobanca Banca di is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  836.00  in Mediobanca Banca di on September 19, 2024 and sell it today you would earn a total of  628.00  from holding Mediobanca Banca di or generate 75.12% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Enagas SA  vs.  Mediobanca Banca di

 Performance 
       Timeline  
Enagas SA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Enagas SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
Mediobanca Banca 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Mediobanca Banca di has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Enagas SA and Mediobanca Banca Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Enagas SA and Mediobanca Banca

The main advantage of trading using opposite Enagas SA and Mediobanca Banca positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enagas SA position performs unexpectedly, Mediobanca Banca 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 Mediobanca Banca will offset losses from the drop in Mediobanca Banca's long position.
The idea behind Enagas SA and Mediobanca Banca di pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

Other Complementary Tools

Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Stocks Directory
Find actively traded stocks across global markets
Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules