Correlation Between Repsol SA and Consultatio
Can any of the company-specific risk be diversified away by investing in both Repsol SA and Consultatio 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 Repsol SA and Consultatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Repsol SA and Consultatio SA, you can compare the effects of market volatilities on Repsol SA and Consultatio 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 Repsol SA with a short position of Consultatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Repsol SA and Consultatio.
Diversification Opportunities for Repsol SA and Consultatio
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Repsol and Consultatio is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Repsol SA and Consultatio SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consultatio SA and Repsol SA 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 Repsol SA are associated (or correlated) with Consultatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consultatio SA has no effect on the direction of Repsol SA i.e., Repsol SA and Consultatio go up and down completely randomly.
Pair Corralation between Repsol SA and Consultatio
Assuming the 90 days trading horizon Repsol SA is not expected to generate positive returns. However, Repsol SA is 94.73 times less risky than Consultatio. It waists most of its returns potential to compensate for thr risk taken. Consultatio is generating about 0.22 per unit of risk. If you would invest 226,500 in Consultatio SA on October 20, 2024 and sell it today you would earn a total of 24,500 from holding Consultatio SA or generate 10.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
Repsol SA vs. Consultatio SA
Performance |
| Timeline |
| Repsol SA |
| Consultatio SA |
Repsol SA and Consultatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Repsol SA and Consultatio
The main advantage of trading using opposite Repsol SA and Consultatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Repsol SA position performs unexpectedly, Consultatio 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 Consultatio will offset losses from the drop in Consultatio's long position.| Repsol SA vs. Alibaba Group Holding | Repsol SA vs. Apple Inc DRC | Repsol SA vs. Alphabet Inc Class A CEDEAR | Repsol SA vs. Amazon Inc |
| Consultatio vs. Telecom Argentina | Consultatio vs. Agrometal SAI | Consultatio vs. Compania de Transporte | Consultatio vs. Transportadora de Gas |
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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