Correlation Between Mccoy Global and Eni SPA

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

By analyzing existing cross correlation between Mccoy Global and Enterprise Group, you can compare the effects of market volatilities on Mccoy Global 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 Mccoy Global with a short position of Eni SPA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mccoy Global and Eni SPA.

Diversification Opportunities for Mccoy Global and Eni SPA

0.14

Correlation Coefficient

Mccoy Global  Eni SPA

Average diversification

The 3 months correlation between Mccoy and Eni is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Mccoy Global and Enterprise Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enterprise Group and Mccoy Global 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 Mccoy Global 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 Enterprise Group has no effect on the direction of Mccoy Global i.e., Mccoy Global and Eni SPA go up and down completely randomly.

Pair Corralation between Mccoy Global and Eni SPA

Assuming the 90 days trading horizon Mccoy Global is expected to generate 0.49 times more return on investment than Eni SPA. However, Mccoy Global is 2.02 times less risky than Eni SPA. It trades about -0.15 of its potential returns per unit of risk. Enterprise Group is currently generating about -0.22 per unit of risk. If you would invest  299.00  in Mccoy Global on September 22, 2024 and sell it today you would lose (19.00) from holding Mccoy Global or give up 6.35% of portfolio value over 90 days.

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

Mccoy Global  vs.  Enterprise Group

Mccoy Global

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mccoy Global are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental drivers, Mccoy Global displayed solid returns over the last few months and may actually be approaching a breakup point.

Enterprise Group

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Enterprise Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Eni SPA displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mccoy Global and Eni SPA

The main advantage of trading using opposite Mccoy Global and Eni SPA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mccoy Global 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.

The idea behind Mccoy Global and Enterprise Group 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.