Correlation Between GameStop Corp and Eni SpA
Can any of the company-specific risk be diversified away by investing in both GameStop Corp and Eni SpA 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 GameStop Corp and Eni SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GameStop Corp and Eni SpA, you can compare the effects of market volatilities on GameStop Corp and Eni SpA 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 GameStop Corp with a short position of Eni SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of GameStop Corp and Eni SpA.
Diversification Opportunities for GameStop Corp and Eni SpA
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GameStop and Eni is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding GameStop Corp and Eni SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eni SpA and GameStop Corp 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 GameStop Corp are associated (or correlated) with Eni SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eni SpA has no effect on the direction of GameStop Corp i.e., GameStop Corp and Eni SpA go up and down completely randomly.
Pair Corralation between GameStop Corp and Eni SpA
Assuming the 90 days trading horizon GameStop Corp is expected to generate 3.93 times more return on investment than Eni SpA. However, GameStop Corp is 3.93 times more volatile than Eni SpA. It trades about 0.34 of its potential returns per unit of risk. Eni SpA is currently generating about -0.1 per unit of risk. If you would invest 2,033 in GameStop Corp on September 4, 2024 and sell it today you would earn a total of 650.00 from holding GameStop Corp or generate 31.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
GameStop Corp vs. Eni SpA
Performance |
| Timeline |
| GameStop Corp |
| Eni SpA |
GameStop Corp and Eni SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GameStop Corp and Eni SpA
The main advantage of trading using opposite GameStop Corp and Eni SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GameStop Corp position performs unexpectedly, Eni SpA 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 Eni SpA will offset losses from the drop in Eni SpA's long position.| GameStop Corp vs. INSURANCE AUST GRP | GameStop Corp vs. PRECISION DRILLING P | GameStop Corp vs. T MOBILE INCDL 00001 | GameStop Corp vs. COMBA TELECOM SYST |
| Eni SpA vs. Sterling Construction | Eni SpA vs. EBRO FOODS | Eni SpA vs. Dairy Farm International | Eni SpA vs. IMPERIAL TOBACCO |
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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