Correlation Between Enel SpA and Equinor ASA
Can any of the company-specific risk be diversified away by investing in both Enel SpA and Equinor ASA 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 Enel SpA and Equinor ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enel SpA and Equinor ASA, you can compare the effects of market volatilities on Enel SpA and Equinor ASA 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 Enel SpA with a short position of Equinor ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enel SpA and Equinor ASA.
Diversification Opportunities for Enel SpA and Equinor ASA
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Enel and Equinor is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Enel SpA and Equinor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinor ASA and Enel 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 Enel SpA are associated (or correlated) with Equinor ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinor ASA has no effect on the direction of Enel SpA i.e., Enel SpA and Equinor ASA go up and down completely randomly.
Pair Corralation between Enel SpA and Equinor ASA
Assuming the 90 days horizon Enel SpA is expected to generate 0.45 times more return on investment than Equinor ASA. However, Enel SpA is 2.21 times less risky than Equinor ASA. It trades about 0.08 of its potential returns per unit of risk. Equinor ASA is currently generating about 0.03 per unit of risk. If you would invest 448.00 in Enel SpA on September 19, 2024 and sell it today you would earn a total of 257.00 from holding Enel SpA or generate 57.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Enel SpA vs. Equinor ASA
Performance |
| Timeline |
| Enel SpA |
| Equinor ASA |
Enel SpA and Equinor ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enel SpA and Equinor ASA
The main advantage of trading using opposite Enel SpA and Equinor ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enel SpA position performs unexpectedly, Equinor ASA 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 Equinor ASA will offset losses from the drop in Equinor ASA's long position.| Enel SpA vs. Park Hotels Resorts | Enel SpA vs. Canon Marketing Japan | Enel SpA vs. Host Hotels Resorts | Enel SpA vs. Tradegate AG Wertpapierhandelsbank |
| Equinor ASA vs. NXP Semiconductors NV | Equinor ASA vs. AGRICULTBK HADR25 YC | Equinor ASA vs. Granite Construction | Equinor ASA vs. Australian Agricultural |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |