Correlation Between Iffe Futura and Repsol
Can any of the company-specific risk be diversified away by investing in both Iffe Futura 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 Iffe Futura and Repsol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iffe Futura SA and Repsol, you can compare the effects of market volatilities on Iffe Futura 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 Iffe Futura with a short position of Repsol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iffe Futura and Repsol.
Diversification Opportunities for Iffe Futura and Repsol
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Iffe and Repsol is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Iffe Futura SA and Repsol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repsol and Iffe Futura 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 Iffe Futura SA 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 Iffe Futura i.e., Iffe Futura and Repsol go up and down completely randomly.
Pair Corralation between Iffe Futura and Repsol
Assuming the 90 days trading horizon Iffe Futura SA is expected to generate 1.84 times more return on investment than Repsol. However, Iffe Futura is 1.84 times more volatile than Repsol. It trades about 0.02 of its potential returns per unit of risk. Repsol is currently generating about -0.02 per unit of risk. If you would invest 58.00 in Iffe Futura SA on November 2, 2024 and sell it today you would earn a total of 8.00 from holding Iffe Futura SA or generate 13.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Iffe Futura SA vs. Repsol
Performance |
| Timeline |
| Iffe Futura SA |
| Repsol |
Iffe Futura and Repsol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iffe Futura and Repsol
The main advantage of trading using opposite Iffe Futura and Repsol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iffe Futura 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.| Iffe Futura vs. Tier1 Technology SA | Iffe Futura vs. Inhome Prime Properties | Iffe Futura vs. NH Hoteles | Iffe Futura vs. Technomeca Aerospace SA |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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