Correlation Between ENN Energy and Snam SpA
Can any of the company-specific risk be diversified away by investing in both ENN Energy and Snam 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 ENN Energy and Snam SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENN Energy Holdings and Snam SpA, you can compare the effects of market volatilities on ENN Energy and Snam 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 ENN Energy with a short position of Snam SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENN Energy and Snam SpA.
Diversification Opportunities for ENN Energy and Snam SpA
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ENN and Snam is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding ENN Energy Holdings and Snam SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snam SpA and ENN Energy 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 ENN Energy Holdings are associated (or correlated) with Snam SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snam SpA has no effect on the direction of ENN Energy i.e., ENN Energy and Snam SpA go up and down completely randomly.
Pair Corralation between ENN Energy and Snam SpA
Assuming the 90 days trading horizon ENN Energy Holdings is expected to generate 3.33 times more return on investment than Snam SpA. However, ENN Energy is 3.33 times more volatile than Snam SpA. It trades about 0.07 of its potential returns per unit of risk. Snam SpA is currently generating about 0.01 per unit of risk. If you would invest 370.00 in ENN Energy Holdings on September 4, 2024 and sell it today you would earn a total of 255.00 from holding ENN Energy Holdings or generate 68.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
ENN Energy Holdings vs. Snam SpA
Performance |
| Timeline |
| ENN Energy Holdings |
| Snam SpA |
ENN Energy and Snam SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENN Energy and Snam SpA
The main advantage of trading using opposite ENN Energy and Snam SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENN Energy position performs unexpectedly, Snam 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 Snam SpA will offset losses from the drop in Snam SpA's long position.| ENN Energy vs. Evolution Mining Limited | ENN Energy vs. Sterling Construction | ENN Energy vs. ADRIATIC METALS LS 013355 | ENN Energy vs. VIVA WINE GROUP |
| Snam SpA vs. North American Construction | Snam SpA vs. Penta Ocean Construction Co | Snam SpA vs. Adtalem Global Education | Snam SpA vs. Sterling Construction |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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