Correlation Between Chiba Bank and Repsol
Can any of the company-specific risk be diversified away by investing in both Chiba Bank and Repsol 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 Chiba Bank and Repsol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chiba Bank and Repsol, you can compare the effects of market volatilities on Chiba Bank and Repsol 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 Chiba Bank with a short position of Repsol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chiba Bank and Repsol.
Diversification Opportunities for Chiba Bank and Repsol
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chiba and Repsol is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Chiba Bank and Repsol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repsol and Chiba Bank 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 Chiba Bank are associated (or correlated) with Repsol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repsol has no effect on the direction of Chiba Bank i.e., Chiba Bank and Repsol go up and down completely randomly.
Pair Corralation between Chiba Bank and Repsol
Assuming the 90 days horizon Chiba Bank is expected to generate 1.98 times more return on investment than Repsol. However, Chiba Bank is 1.98 times more volatile than Repsol. It trades about 0.13 of its potential returns per unit of risk. Repsol is currently generating about -0.07 per unit of risk. If you would invest 755.00 in Chiba Bank on September 12, 2024 and sell it today you would earn a total of 40.00 from holding Chiba Bank or generate 5.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chiba Bank vs. Repsol
Performance |
| Timeline |
| Chiba Bank |
| Repsol |
Chiba Bank and Repsol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chiba Bank and Repsol
The main advantage of trading using opposite Chiba Bank and Repsol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chiba Bank position performs unexpectedly, Repsol 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 Repsol will offset losses from the drop in Repsol's long position.The idea behind Chiba Bank and Repsol 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.| Repsol vs. REVO INSURANCE SPA | Repsol vs. RCM TECHNOLOGIES | Repsol vs. Lion Biotechnologies | Repsol vs. Chiba Bank |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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