Correlation Between Mediobanca Banca and Enagas SA
Can any of the company-specific risk be diversified away by investing in both Mediobanca Banca and Enagas 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 Mediobanca Banca and Enagas SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mediobanca Banca di and Enagas SA, you can compare the effects of market volatilities on Mediobanca Banca and Enagas 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 Mediobanca Banca with a short position of Enagas SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mediobanca Banca and Enagas SA.
Diversification Opportunities for Mediobanca Banca and Enagas SA
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mediobanca and Enagas is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Mediobanca Banca di and Enagas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enagas SA and Mediobanca Banca 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 Mediobanca Banca di are associated (or correlated) with Enagas SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enagas SA has no effect on the direction of Mediobanca Banca i.e., Mediobanca Banca and Enagas SA go up and down completely randomly.
Pair Corralation between Mediobanca Banca and Enagas SA
Assuming the 90 days horizon Mediobanca Banca di is expected to generate 1.08 times more return on investment than Enagas SA. However, Mediobanca Banca is 1.08 times more volatile than Enagas SA. It trades about 0.08 of its potential returns per unit of risk. Enagas SA is currently generating about -0.02 per unit of risk. If you would invest 944.00 in Mediobanca Banca di on November 7, 2024 and sell it today you would earn a total of 696.00 from holding Mediobanca Banca di or generate 73.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mediobanca Banca di vs. Enagas SA
Performance |
| Timeline |
| Mediobanca Banca |
| Enagas SA |
Mediobanca Banca and Enagas SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mediobanca Banca and Enagas SA
The main advantage of trading using opposite Mediobanca Banca and Enagas SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mediobanca Banca position performs unexpectedly, Enagas 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 Enagas SA will offset losses from the drop in Enagas SA's long position.| Mediobanca Banca vs. Absa Group Limited | Mediobanca Banca vs. Societe Generale ADR | Mediobanca Banca vs. BNP Paribas SA | Mediobanca Banca vs. Intesa Sanpaolo SpA |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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