Correlation Between Energean Oil and Enbridge
Can any of the company-specific risk be diversified away by investing in both Energean Oil and Enbridge 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 Energean Oil and Enbridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energean Oil Gas and Enbridge, you can compare the effects of market volatilities on Energean Oil and Enbridge 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 Energean Oil with a short position of Enbridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energean Oil and Enbridge.
Diversification Opportunities for Energean Oil and Enbridge
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Energean and Enbridge is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Energean Oil Gas and Enbridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge and Energean Oil 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 Energean Oil Gas are associated (or correlated) with Enbridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge has no effect on the direction of Energean Oil i.e., Energean Oil and Enbridge go up and down completely randomly.
Pair Corralation between Energean Oil and Enbridge
Assuming the 90 days trading horizon Energean Oil is expected to generate 3.76 times less return on investment than Enbridge. In addition to that, Energean Oil is 2.06 times more volatile than Enbridge. It trades about 0.04 of its total potential returns per unit of risk. Enbridge is currently generating about 0.29 per unit of volatility. If you would invest 5,300 in Enbridge on November 2, 2024 and sell it today you would earn a total of 1,143 from holding Enbridge or generate 21.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 64.15% |
| Values | Daily Returns |
Energean Oil Gas vs. Enbridge
Performance |
| Timeline |
| Energean Oil Gas |
| Enbridge |
Energean Oil and Enbridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energean Oil and Enbridge
The main advantage of trading using opposite Energean Oil and Enbridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energean Oil position performs unexpectedly, Enbridge 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 Enbridge will offset losses from the drop in Enbridge's long position.| Energean Oil vs. Zoom Video Communications | Energean Oil vs. Public Storage | Energean Oil vs. Gaztransport et Technigaz | Energean Oil vs. Ion Beam Applications |
| Enbridge vs. Delta Air Lines | Enbridge vs. Concurrent Technologies Plc | Enbridge vs. Ryanair Holdings plc | Enbridge vs. Pentair PLC |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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