Correlation Between Snam SpA and ENN Energy
Can any of the company-specific risk be diversified away by investing in both Snam SpA and ENN Energy 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 Snam SpA and ENN Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snam SpA and ENN Energy Holdings, you can compare the effects of market volatilities on Snam SpA and ENN Energy 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 Snam SpA with a short position of ENN Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snam SpA and ENN Energy.
Diversification Opportunities for Snam SpA and ENN Energy
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Snam and ENN is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Snam SpA and ENN Energy Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENN Energy Holdings and Snam SpA 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 Snam SpA are associated (or correlated) with ENN Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENN Energy Holdings has no effect on the direction of Snam SpA i.e., Snam SpA and ENN Energy go up and down completely randomly.
Pair Corralation between Snam SpA and ENN Energy
Assuming the 90 days horizon Snam SpA is expected to generate 0.36 times more return on investment than ENN Energy. However, Snam SpA is 2.81 times less risky than ENN Energy. It trades about 0.03 of its potential returns per unit of risk. ENN Energy Holdings is currently generating about -0.03 per unit of risk. If you would invest 427.00 in Snam SpA on September 3, 2024 and sell it today you would earn a total of 13.00 from holding Snam SpA or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snam SpA vs. ENN Energy Holdings
Performance |
| Timeline |
| Snam SpA |
| ENN Energy Holdings |
Snam SpA and ENN Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snam SpA and ENN Energy
The main advantage of trading using opposite Snam SpA and ENN Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snam SpA position performs unexpectedly, ENN Energy 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 ENN Energy will offset losses from the drop in ENN Energy's long position.| Snam SpA vs. Universal Display | Snam SpA vs. Playtech plc | Snam SpA vs. USWE SPORTS AB | Snam SpA vs. Ming Le Sports |
| ENN Energy vs. Harmony Gold Mining | ENN Energy vs. MCEWEN MINING INC | ENN Energy vs. ARISTOCRAT LEISURE | ENN Energy vs. JD SPORTS FASH |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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