Correlation Between Energean Oil and Ithaca Energy
Can any of the company-specific risk be diversified away by investing in both Energean Oil and Ithaca Energy 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 Ithaca Energy 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 Ithaca Energy PLC, you can compare the effects of market volatilities on Energean Oil and Ithaca Energy 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 Ithaca Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energean Oil and Ithaca Energy.
Diversification Opportunities for Energean Oil and Ithaca Energy
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Energean and Ithaca is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Energean Oil Gas and Ithaca Energy PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ithaca Energy PLC 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 Ithaca Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ithaca Energy PLC has no effect on the direction of Energean Oil i.e., Energean Oil and Ithaca Energy go up and down completely randomly.
Pair Corralation between Energean Oil and Ithaca Energy
Assuming the 90 days trading horizon Energean Oil is expected to generate 4.16 times less return on investment than Ithaca Energy. But when comparing it to its historical volatility, Energean Oil Gas is 1.24 times less risky than Ithaca Energy. It trades about 0.26 of its potential returns per unit of risk. Ithaca Energy PLC is currently generating about 0.89 of returns per unit of risk over similar time horizon. If you would invest 10,400 in Ithaca Energy PLC on October 20, 2024 and sell it today you would earn a total of 3,840 from holding Ithaca Energy PLC or generate 36.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Energean Oil Gas vs. Ithaca Energy PLC
Performance |
| Timeline |
| Energean Oil Gas |
| Ithaca Energy PLC |
Energean Oil and Ithaca Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energean Oil and Ithaca Energy
The main advantage of trading using opposite Energean Oil and Ithaca Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energean Oil position performs unexpectedly, Ithaca Energy 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 Ithaca Energy will offset losses from the drop in Ithaca Energy's long position.| Energean Oil vs. Zoom Video Communications | Energean Oil vs. Enbridge | Energean Oil vs. Endo International PLC | Energean Oil vs. Somero Enterprise |
| Ithaca Energy vs. Seraphim Space Investment | Ithaca Energy vs. Playtech Plc | Ithaca Energy vs. BE Semiconductor Industries | Ithaca Energy vs. Chrysalis Investments |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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