Correlation Between Esso SAF and Enogia SAS
Can any of the company-specific risk be diversified away by investing in both Esso SAF and Enogia SAS 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 Esso SAF and Enogia SAS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esso SAF and Enogia SAS, you can compare the effects of market volatilities on Esso SAF and Enogia SAS 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 Esso SAF with a short position of Enogia SAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esso SAF and Enogia SAS.
Diversification Opportunities for Esso SAF and Enogia SAS
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Esso and Enogia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Esso SAF and Enogia SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enogia SAS and Esso SAF 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 Esso SAF are associated (or correlated) with Enogia SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enogia SAS has no effect on the direction of Esso SAF i.e., Esso SAF and Enogia SAS go up and down completely randomly.
Pair Corralation between Esso SAF and Enogia SAS
If you would invest (100.00) in Enogia SAS on September 6, 2024 and sell it today you would earn a total of 100.00 from holding Enogia SAS or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Esso SAF vs. Enogia SAS
Performance |
Timeline |
Esso SAF |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Enogia SAS |
Esso SAF and Enogia SAS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Esso SAF and Enogia SAS
The main advantage of trading using opposite Esso SAF and Enogia SAS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esso SAF position performs unexpectedly, Enogia SAS 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 Enogia SAS will offset losses from the drop in Enogia SAS's long position.The idea behind Esso SAF and Enogia SAS 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.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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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