Correlation Between Enel SpA and OAKTRSPECLENDNEW

Can any of the company-specific risk be diversified away by investing in both Enel SpA and OAKTRSPECLENDNEW 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 Enel SpA and OAKTRSPECLENDNEW into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Enel SpA and OAKTRSPECLENDNEW, you can compare the effects of market volatilities on Enel SpA and OAKTRSPECLENDNEW 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 Enel SpA with a short position of OAKTRSPECLENDNEW. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enel SpA and OAKTRSPECLENDNEW.

Diversification Opportunities for Enel SpA and OAKTRSPECLENDNEW

-0.09

Correlation Coefficient

Enel SpA  OAKTRSPECLENDNEW

Good diversification

The 3 months correlation between Enel and OAKTRSPECLENDNEW is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Enel SpA and OAKTRSPECLENDNEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OAKTRSPECLENDNEW and Enel 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 Enel SpA are associated (or correlated) with OAKTRSPECLENDNEW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OAKTRSPECLENDNEW has no effect on the direction of Enel SpA i.e., Enel SpA and OAKTRSPECLENDNEW go up and down completely randomly.

Pair Corralation between Enel SpA and OAKTRSPECLENDNEW

Assuming the 90 days horizon Enel SpA is expected to generate 8.11 times less return on investment than OAKTRSPECLENDNEW. But when comparing it to its historical volatility, Enel SpA is 1.45 times less risky than OAKTRSPECLENDNEW. It trades about 0.01 of its potential returns per unit of risk. OAKTRSPECLENDNEW is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,391  in OAKTRSPECLENDNEW on September 20, 2024 and sell it today you would earn a total of  61.00  from holding OAKTRSPECLENDNEW or generate 4.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Enel SpA  vs.  OAKTRSPECLENDNEW

Enel SpA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enel SpA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Enel SpA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

OAKTRSPECLENDNEW

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in OAKTRSPECLENDNEW are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, OAKTRSPECLENDNEW is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Enel SpA and OAKTRSPECLENDNEW

The main advantage of trading using opposite Enel SpA and OAKTRSPECLENDNEW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enel SpA position performs unexpectedly, OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW will offset losses from the drop in OAKTRSPECLENDNEW's long position.

The idea behind Enel SpA and OAKTRSPECLENDNEW pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.