Correlation Between Shell PLC and Repsol SA
Can any of the company-specific risk be diversified away by investing in both Shell PLC 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 Shell PLC and Repsol SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shell PLC and Repsol SA, you can compare the effects of market volatilities on Shell PLC 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 Shell PLC with a short position of Repsol SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shell PLC and Repsol SA.
Diversification Opportunities for Shell PLC and Repsol SA
Pay attention - limited upside
The 3 months correlation between Shell and Repsol is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shell PLC and Repsol SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repsol SA and Shell PLC 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 Shell PLC 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 Shell PLC i.e., Shell PLC and Repsol SA go up and down completely randomly.
Pair Corralation between Shell PLC and Repsol SA
If you would invest 2,748 in Shell PLC on January 17, 2025 and sell it today you would earn a total of 452.00 from holding Shell PLC or generate 16.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Shell PLC vs. Repsol SA
Performance |
| Timeline |
| Shell PLC |
| Repsol SA |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Shell PLC and Repsol SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shell PLC and Repsol SA
The main advantage of trading using opposite Shell PLC and Repsol SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shell PLC 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.| Shell PLC vs. Eni SpA | Shell PLC vs. MOL PLC ADR | Shell PLC vs. PetroChina Co Ltd | Shell PLC vs. Equinor ASA |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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