Correlation Between Eni SPA and Imperial Oil
Can any of the company-specific risk be diversified away by investing in both Eni SPA and Imperial Oil 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 Eni SPA and Imperial Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eni SpA ADR and Imperial Oil, you can compare the effects of market volatilities on Eni SPA and Imperial Oil 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 Eni SPA with a short position of Imperial Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eni SPA and Imperial Oil.
Diversification Opportunities for Eni SPA and Imperial Oil
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Eni and Imperial is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Eni SpA ADR and Imperial Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imperial Oil and Eni SPA 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 Eni SpA ADR are associated (or correlated) with Imperial Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imperial Oil has no effect on the direction of Eni SPA i.e., Eni SPA and Imperial Oil go up and down completely randomly.
Pair Corralation between Eni SPA and Imperial Oil
Taking into account the 90-day investment horizon Eni SPA is expected to generate 1.7 times less return on investment than Imperial Oil. But when comparing it to its historical volatility, Eni SpA ADR is 1.24 times less risky than Imperial Oil. It trades about 0.13 of its potential returns per unit of risk. Imperial Oil is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 7,706 in Imperial Oil on June 11, 2025 and sell it today you would earn a total of 1,036 from holding Imperial Oil or generate 13.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eni SpA ADR vs. Imperial Oil
Performance |
| Timeline |
| Eni SpA ADR |
| Imperial Oil |
Eni SPA and Imperial Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eni SPA and Imperial Oil
The main advantage of trading using opposite Eni SPA and Imperial Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eni SPA position performs unexpectedly, Imperial Oil 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 Imperial Oil will offset losses from the drop in Imperial Oil's long position.| Eni SPA vs. TotalEnergies SE ADR | Eni SPA vs. Ecopetrol SA ADR | Eni SPA vs. Shell PLC ADR | Eni SPA vs. Petroleo Brasileiro Petrobras |
| Imperial Oil vs. Suncor Energy | Imperial Oil vs. Ecopetrol SA ADR | Imperial Oil vs. Petroleo Brasileiro Petrobras | Imperial Oil vs. Equinor ASA ADR |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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