Correlation Between Tourmaline Oil and Eni SPA
Can any of the company-specific risk be diversified away by investing in both Tourmaline Oil 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 Tourmaline Oil and Eni SPA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tourmaline Oil Corp and Eni SpA ADR, you can compare the effects of market volatilities on Tourmaline Oil 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 Tourmaline Oil with a short position of Eni SPA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tourmaline Oil and Eni SPA.
Diversification Opportunities for Tourmaline Oil and Eni SPA
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tourmaline and Eni is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Tourmaline Oil Corp and Eni SpA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eni SpA ADR and Tourmaline Oil 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 Tourmaline Oil 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 ADR has no effect on the direction of Tourmaline Oil i.e., Tourmaline Oil and Eni SPA go up and down completely randomly.
Pair Corralation between Tourmaline Oil and Eni SPA
Assuming the 90 days horizon Tourmaline Oil is expected to generate 1.58 times less return on investment than Eni SPA. In addition to that, Tourmaline Oil is 1.44 times more volatile than Eni SpA ADR. It trades about 0.01 of its total potential returns per unit of risk. Eni SpA ADR is currently generating about 0.02 per unit of volatility. If you would invest 2,588 in Eni SpA ADR on September 3, 2024 and sell it today you would earn a total of 219.00 from holding Eni SpA ADR or generate 8.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tourmaline Oil Corp vs. Eni SpA ADR
Performance |
| Timeline |
| Tourmaline Oil Corp |
| Eni SpA ADR |
Tourmaline Oil and Eni SPA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tourmaline Oil and Eni SPA
The main advantage of trading using opposite Tourmaline Oil and Eni SPA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tourmaline Oil 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.| Tourmaline Oil vs. Seadrill Limited | Tourmaline Oil vs. Noble plc | Tourmaline Oil vs. Borr Drilling | Tourmaline Oil vs. SCOR PK |
| Eni SPA vs. TotalEnergies SE ADR | Eni SPA vs. Ecopetrol SA ADR | Eni SPA vs. Shell PLC ADR | Eni SPA vs. Petroleo Brasileiro Petrobras |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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