Correlation Between Repsol and Grupo Catalana
Can any of the company-specific risk be diversified away by investing in both Repsol and Grupo Catalana 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 and Grupo Catalana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Repsol and Grupo Catalana Occidente, you can compare the effects of market volatilities on Repsol and Grupo Catalana 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 with a short position of Grupo Catalana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Repsol and Grupo Catalana.
Diversification Opportunities for Repsol and Grupo Catalana
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Repsol and Grupo is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Repsol and Grupo Catalana Occidente in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Catalana Occidente and Repsol 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 are associated (or correlated) with Grupo Catalana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Catalana Occidente has no effect on the direction of Repsol i.e., Repsol and Grupo Catalana go up and down completely randomly.
Pair Corralation between Repsol and Grupo Catalana
Assuming the 90 days trading horizon Repsol is expected to under-perform the Grupo Catalana. In addition to that, Repsol is 1.42 times more volatile than Grupo Catalana Occidente. It trades about 0.0 of its total potential returns per unit of risk. Grupo Catalana Occidente is currently generating about 0.06 per unit of volatility. If you would invest 2,735 in Grupo Catalana Occidente on August 30, 2024 and sell it today you would earn a total of 845.00 from holding Grupo Catalana Occidente or generate 30.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Repsol vs. Grupo Catalana Occidente
Performance |
| Timeline |
| Repsol |
| Grupo Catalana Occidente |
Repsol and Grupo Catalana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Repsol and Grupo Catalana
The main advantage of trading using opposite Repsol and Grupo Catalana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Repsol position performs unexpectedly, Grupo Catalana 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 Grupo Catalana will offset losses from the drop in Grupo Catalana's long position.The idea behind Repsol and Grupo Catalana Occidente 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.| Grupo Catalana vs. Metrovacesa SA | Grupo Catalana vs. Atom Hoteles Socimi | Grupo Catalana vs. Aedas Homes SL | Grupo Catalana vs. Hispanotels Inversiones SOCIMI |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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