Correlation Between Repsol SA and OMV AG
Can any of the company-specific risk be diversified away by investing in both Repsol SA and OMV AG 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 OMV AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Repsol SA and OMV AG PK, you can compare the effects of market volatilities on Repsol SA and OMV AG 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 OMV AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Repsol SA and OMV AG.
Diversification Opportunities for Repsol SA and OMV AG
Very good diversification
The 3 months correlation between Repsol and OMV is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Repsol SA and OMV AG PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OMV AG PK 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 OMV AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OMV AG PK has no effect on the direction of Repsol SA i.e., Repsol SA and OMV AG go up and down completely randomly.
Pair Corralation between Repsol SA and OMV AG
If you would invest 1,004 in OMV AG PK on August 28, 2024 and sell it today you would earn a total of 23.00 from holding OMV AG PK or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.48% |
| Values | Daily Returns |
Repsol SA vs. OMV AG PK
Performance |
| Timeline |
| Repsol SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| OMV AG PK |
Repsol SA and OMV AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Repsol SA and OMV AG
The main advantage of trading using opposite Repsol SA and OMV AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Repsol SA position performs unexpectedly, OMV AG 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 OMV AG will offset losses from the drop in OMV AG's long position.The idea behind Repsol SA and OMV AG PK 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.| OMV AG vs. Equinor ASA ADR | OMV AG vs. TotalEnergies SE ADR | OMV AG vs. Ecopetrol SA ADR | OMV AG vs. National Fuel 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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