Correlation Between Sempra Energy and EON SE

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

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

Diversification Opportunities for Sempra Energy and EON SE

0.0

Correlation Coefficient

Sempra Energy  EON SE

Pay attention - limited upside

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

Pair Corralation between Sempra Energy and EON SE

If you would invest (100.00) in EON SE ADR on December 27, 2024 and sell it today you would earn a total of  100.00  from holding EON SE ADR 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

Sempra Energy  vs.  EON SE ADR

Sempra Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sempra Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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.

Pair Trading with Sempra Energy and EON SE

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

The idea behind Sempra Energy and EON SE ADR 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.