Correlation Between Chevron Corp and Eni SPA
Can any of the company-specific risk be diversified away by investing in both Chevron Corp 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 Chevron Corp and Eni SPA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and Eni SpA ADR, you can compare the effects of market volatilities on Chevron Corp 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 Chevron Corp with a short position of Eni SPA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and Eni SPA.
Diversification Opportunities for Chevron Corp and Eni SPA
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chevron and Eni is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Eni SpA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eni SpA ADR and Chevron Corp 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 Chevron Corp 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 Eni SpA ADR has no effect on the direction of Chevron Corp i.e., Chevron Corp and Eni SPA go up and down completely randomly.
Pair Corralation between Chevron Corp and Eni SPA
Considering the 90-day investment horizon Chevron Corp is expected to generate 1.14 times less return on investment than Eni SPA. But when comparing it to its historical volatility, Chevron Corp is 1.11 times less risky than Eni SPA. It trades about 0.17 of its potential returns per unit of risk. Eni SpA ADR is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 3,049 in Eni SpA ADR on December 30, 2023 and sell it today you would earn a total of 123.00 from holding Eni SpA ADR or generate 4.03% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Chevron Corp vs. Eni SpA ADR
Performance |
Timeline |
Chevron Corp |
Eni SpA ADR |
Chevron Corp and Eni SPA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chevron Corp and Eni SPA
The main advantage of trading using opposite Chevron Corp and Eni SPA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp 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.Chevron Corp vs. Cisco Systems | Chevron Corp vs. Johnson Johnson | Chevron Corp vs. Merck Company | Chevron Corp vs. JPMorgan Chase Co |
Eni SPA vs. Cisco Systems | Eni SPA vs. Johnson Johnson | Eni SPA vs. Merck Company | Eni SPA vs. JPMorgan Chase Co |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume |