Correlation Between High Arctic and Eni SPA

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

By analyzing existing cross correlation between High Arctic Energy and Enterprise Group, you can compare the effects of market volatilities on High Arctic 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 High Arctic with a short position of Eni SPA. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Arctic and Eni SPA.

Diversification Opportunities for High Arctic and Eni SPA

0.12

Correlation Coefficient

High Arctic  Eni SPA

Average diversification

The 3 months correlation between High and Eni is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding High Arctic Energy and Enterprise Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enterprise Group and High Arctic 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 High Arctic Energy 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 Enterprise Group has no effect on the direction of High Arctic i.e., High Arctic and Eni SPA go up and down completely randomly.

Pair Corralation between High Arctic and Eni SPA

Assuming the 90 days trading horizon High Arctic is expected to generate 2.17 times less return on investment than Eni SPA. In addition to that, High Arctic is 1.09 times more volatile than Enterprise Group. It trades about 0.05 of its total potential returns per unit of risk. Enterprise Group is currently generating about 0.11 per unit of volatility. If you would invest  134.00  in Enterprise Group on April 25, 2025 and sell it today you would earn a total of  31.00  from holding Enterprise Group or generate 23.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

High Arctic Energy  vs.  Enterprise Group

High Arctic Energy

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in High Arctic Energy are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, High Arctic may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Enterprise Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Enterprise Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Eni SPA displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with High Arctic and Eni SPA

The main advantage of trading using opposite High Arctic and Eni SPA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Arctic 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.

The idea behind High Arctic Energy and Enterprise Group 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.