Correlation Between Engie SA and Enel SpA
Can any of the company-specific risk be diversified away by investing in both Engie SA and Enel 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 Engie SA and Enel SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Engie SA and Enel SpA, you can compare the effects of market volatilities on Engie SA and Enel 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 Engie SA with a short position of Enel SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Engie SA and Enel SpA.
Diversification Opportunities for Engie SA and Enel SpA
Poor diversification
The 3 months correlation between Engie and Enel is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Engie SA and Enel SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enel SpA and Engie SA 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 Engie SA are associated (or correlated) with Enel SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enel SpA has no effect on the direction of Engie SA i.e., Engie SA and Enel SpA go up and down completely randomly.
Pair Corralation between Engie SA and Enel SpA
Assuming the 90 days horizon Engie SA is expected to generate 0.9 times more return on investment than Enel SpA. However, Engie SA is 1.11 times less risky than Enel SpA. It trades about -0.14 of its potential returns per unit of risk. Enel SpA is currently generating about -0.13 per unit of risk. If you would invest 1,555 in Engie SA on August 31, 2024 and sell it today you would lose (55.00) from holding Engie SA or give up 3.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Engie SA vs. Enel SpA
Performance |
| Timeline |
| Engie SA |
| Enel SpA |
Engie SA and Enel SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Engie SA and Enel SpA
The main advantage of trading using opposite Engie SA and Enel SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Engie SA position performs unexpectedly, Enel 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 Enel SpA will offset losses from the drop in Enel SpA's long position.| Engie SA vs. ACCSYS TECHPLC EO | Engie SA vs. Lifeway Foods | Engie SA vs. Axcelis Technologies | Engie SA vs. NISSIN FOODS HLDGS |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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