Correlation Between Esso SAF and Oeneo SA
Can any of the company-specific risk be diversified away by investing in both Esso SAF and Oeneo SA 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 Oeneo SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esso SAF and Oeneo SA, you can compare the effects of market volatilities on Esso SAF and Oeneo SA 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 Oeneo SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esso SAF and Oeneo SA.
Diversification Opportunities for Esso SAF and Oeneo SA
Very weak diversification
The 3 months correlation between Esso and Oeneo is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Esso SAF and Oeneo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oeneo SA 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 Oeneo SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oeneo SA has no effect on the direction of Esso SAF i.e., Esso SAF and Oeneo SA go up and down completely randomly.
Pair Corralation between Esso SAF and Oeneo SA
Assuming the 90 days horizon Esso SAF is expected to under-perform the Oeneo SA. In addition to that, Esso SAF is 2.7 times more volatile than Oeneo SA. It trades about -0.12 of its total potential returns per unit of risk. Oeneo SA is currently generating about -0.1 per unit of volatility. If you would invest 1,125 in Oeneo SA on September 1, 2024 and sell it today you would lose (171.00) from holding Oeneo SA or give up 15.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Esso SAF vs. Oeneo SA
Performance |
| Timeline |
| Esso SAF |
| Oeneo SA |
Esso SAF and Oeneo SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esso SAF and Oeneo SA
The main advantage of trading using opposite Esso SAF and Oeneo SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esso SAF position performs unexpectedly, Oeneo SA 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 Oeneo SA will offset losses from the drop in Oeneo SA'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 |
| Oeneo SA vs. Robertet SA | Oeneo SA vs. Virbac SA | Oeneo SA vs. Tonnellerie Francois Freres | Oeneo SA vs. Thermador Groupe SA |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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