Correlation Between Energean Plc and Inpex

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

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

Diversification Opportunities for Energean Plc and Inpex

-0.49

Correlation Coefficient

Energean Plc  Inpex

Very good diversification

The 3 months correlation between Energean and Inpex is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Energean plc and Inpex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inpex and Energean Plc 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 Energean plc are associated (or correlated) with Inpex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inpex has no effect on the direction of Energean Plc i.e., Energean Plc and Inpex go up and down completely randomly.

Pair Corralation between Energean Plc and Inpex

Assuming the 90 days horizon Energean plc is expected to generate 0.81 times more return on investment than Inpex. However, Energean plc is 1.24 times less risky than Inpex. It trades about 0.04 of its potential returns per unit of risk. Inpex is currently generating about 0.01 per unit of risk. If you would invest  1,085  in Energean plc on September 30, 2024 and sell it today you would earn a total of  310.00  from holding Energean plc or generate 28.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	77.48%
Values	Daily Returns

Energean plc  vs.  Inpex

Energean plc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Energean plc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Energean Plc may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Inpex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inpex has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Energean Plc and Inpex

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

The idea behind Energean plc and Inpex 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.