Correlation Between Esso SAF and Enogia SAS
Can any of the company-specific risk be diversified away by investing in both Esso SAF and Enogia SAS 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 Esso SAF and Enogia SAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esso SAF and Enogia SAS, you can compare the effects of market volatilities on Esso SAF and Enogia SAS 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 Esso SAF with a short position of Enogia SAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esso SAF and Enogia SAS.
Diversification Opportunities for Esso SAF and Enogia SAS
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Esso and Enogia is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Esso SAF and Enogia SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enogia SAS and Esso SAF 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 Esso SAF are associated (or correlated) with Enogia SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enogia SAS has no effect on the direction of Esso SAF i.e., Esso SAF and Enogia SAS go up and down completely randomly.
Pair Corralation between Esso SAF and Enogia SAS
Assuming the 90 days horizon Esso SAF is expected to under-perform the Enogia SAS. In addition to that, Esso SAF is 1.67 times more volatile than Enogia SAS. It trades about -0.12 of its total potential returns per unit of risk. Enogia SAS is currently generating about -0.09 per unit of volatility. If you would invest 206.00 in Enogia SAS on September 1, 2024 and sell it today you would lose (48.00) from holding Enogia SAS or give up 23.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Esso SAF vs. Enogia SAS
Performance |
| Timeline |
| Esso SAF |
| Enogia SAS |
Esso SAF and Enogia SAS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esso SAF and Enogia SAS
The main advantage of trading using opposite Esso SAF and Enogia SAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esso SAF position performs unexpectedly, Enogia SAS 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 Enogia SAS will offset losses from the drop in Enogia SAS's long position.| Esso SAF vs. Etablissements Maurel et | Esso SAF vs. Eramet SA | Esso SAF vs. Socit BIC SA | Esso SAF vs. TotalEnergies EP Gabon |
| Enogia SAS vs. Enertime SAS | Enogia SAS vs. Entreparticuli | Enogia SAS vs. Oeneo SA | Enogia SAS vs. Stradim Espace Finances |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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