Correlation Between EON SE and ENEL Societa

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

By analyzing existing cross correlation between EON SE ADR and ENEL Societa per, you can compare the effects of market volatilities on EON SE and ENEL Societa 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 EON SE with a short position of ENEL Societa. Check out your portfolio center. Please also check ongoing floating volatility patterns of EON SE and ENEL Societa.

Diversification Opportunities for EON SE and ENEL Societa

0.0

Correlation Coefficient

EON SE  ENEL Societa

Pay attention - limited upside

The 3 months correlation between EON and ENEL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EON SE ADR and ENEL Societa per in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENEL Societa per and EON SE 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 EON SE ADR are associated (or correlated) with ENEL Societa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENEL Societa per has no effect on the direction of EON SE i.e., EON SE and ENEL Societa go up and down completely randomly.

Pair Corralation between EON SE and ENEL Societa

If you would invest  692.00  in ENEL Societa per on December 27, 2024 and sell it today you would earn a total of  99.00  from holding ENEL Societa per or generate 14.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

EON SE ADR  vs.  ENEL Societa per

EON SE ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days EON SE ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, EON SE is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

ENEL Societa per

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ENEL Societa per are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, ENEL Societa showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EON SE and ENEL Societa

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

The idea behind EON SE ADR and ENEL Societa per 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.