Correlation Between Hess and Repsol SA

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Can any of the company-specific risk be diversified away by investing in both Hess 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 Hess and Repsol SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hess Corporation and Repsol SA, you can compare the effects of market volatilities on Hess 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 Hess with a short position of Repsol SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hess and Repsol SA.

Diversification Opportunities for Hess and Repsol SA

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Hess and Repsol is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hess Corp. and Repsol SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repsol SA and Hess 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 Hess Corporation 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 Hess i.e., Hess and Repsol SA go up and down completely randomly.

Pair Corralation between Hess and Repsol SA

If you would invest  14,490  in Hess Corporation on December 29, 2023 and sell it today you would earn a total of  774.00  from holding Hess Corporation or generate 5.34% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Hess Corp.  vs.  Repsol SA

 Performance 
       Timeline  
Hess 

Risk-Adjusted Performance

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Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Hess Corporation are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, Hess may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Repsol SA 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days Repsol SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Repsol SA is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Hess and Repsol SA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hess and Repsol SA

The main advantage of trading using opposite Hess and Repsol SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hess 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.
The idea behind Hess Corporation and Repsol SA 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.
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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