Correlation Between Repsol SA and PBF Energy
Can any of the company-specific risk be diversified away by investing in both Repsol SA and PBF Energy 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 PBF Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Repsol SA and PBF Energy, you can compare the effects of market volatilities on Repsol SA and PBF Energy 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 PBF Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Repsol SA and PBF Energy.
Diversification Opportunities for Repsol SA and PBF Energy
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Repsol and PBF is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Repsol SA and PBF Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PBF Energy 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 PBF Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PBF Energy has no effect on the direction of Repsol SA i.e., Repsol SA and PBF Energy go up and down completely randomly.
Pair Corralation between Repsol SA and PBF Energy
If you would invest 1,583 in Repsol SA on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Repsol SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.8% |
| Values | Daily Returns |
Repsol SA vs. PBF Energy
Performance |
| Timeline |
| Repsol SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| PBF Energy |
Repsol SA and PBF Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Repsol SA and PBF Energy
The main advantage of trading using opposite Repsol SA and PBF Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Repsol SA position performs unexpectedly, PBF Energy 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 PBF Energy will offset losses from the drop in PBF Energy's long position.The idea behind Repsol SA and PBF Energy 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.| PBF Energy vs. Delek Energy | PBF Energy vs. CVR Energy | PBF Energy vs. Valero Energy | PBF Energy vs. Marathon Petroleum Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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