Correlation Between Phillips and Repsol SA
Can any of the company-specific risk be diversified away by investing in both Phillips and Repsol SA 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 Phillips and Repsol SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phillips 66 and Repsol SA, you can compare the effects of market volatilities on Phillips and Repsol SA 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 Phillips with a short position of Repsol SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phillips and Repsol SA.
Diversification Opportunities for Phillips and Repsol SA
Very good diversification
The 3 months correlation between Phillips and Repsol is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Phillips 66 and Repsol SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repsol SA and Phillips 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 Phillips 66 are associated (or correlated) with Repsol SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repsol SA has no effect on the direction of Phillips i.e., Phillips and Repsol SA go up and down completely randomly.
Pair Corralation between Phillips and Repsol SA
If you would invest 12,776 in Phillips 66 on August 28, 2024 and sell it today you would earn a total of 552.00 from holding Phillips 66 or generate 4.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Phillips 66 vs. Repsol SA
Performance |
| Timeline |
| Phillips 66 |
| Repsol SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Phillips and Repsol SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phillips and Repsol SA
The main advantage of trading using opposite Phillips and Repsol SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phillips position performs unexpectedly, Repsol SA 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 SA will offset losses from the drop in Repsol SA's long position.| Phillips vs. Marathon Petroleum Corp | Phillips vs. HF Sinclair Corp | Phillips vs. PBF Energy | Phillips vs. Sunoco LP |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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