Correlation Between Exxon and Eni SpA
Can any of the company-specific risk be diversified away by investing in both Exxon 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 Exxon and Eni SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exxon Mobil Corp and Eni SpA, you can compare the effects of market volatilities on Exxon 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 Exxon with a short position of Eni SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Eni SpA.
Diversification Opportunities for Exxon and Eni SpA
Good diversification
The 3 months correlation between Exxon and Eni is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Eni SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eni SpA and Exxon 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 Exxon Mobil 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 has no effect on the direction of Exxon i.e., Exxon and Eni SpA go up and down completely randomly.
Pair Corralation between Exxon and Eni SpA
Considering the 90-day investment horizon Exxon is expected to generate 5.93 times less return on investment than Eni SpA. But when comparing it to its historical volatility, Exxon Mobil Corp is 4.75 times less risky than Eni SpA. It trades about 0.03 of its potential returns per unit of risk. Eni SpA is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,254 in Eni SpA on August 30, 2024 and sell it today you would earn a total of 296.00 from holding Eni SpA or generate 23.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 69.96% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Eni SpA
Performance |
| Timeline |
| Exxon Mobil Corp |
| Eni SpA |
Exxon and Eni SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Eni SpA
The main advantage of trading using opposite Exxon and Eni SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon 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.| Exxon vs. BP PLC ADR | Exxon vs. Shell PLC ADR | Exxon vs. Petroleo Brasileiro Petrobras | Exxon vs. Suncor Energy |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |