Correlation Between Repsol SA and Petrobras Argentina
Can any of the company-specific risk be diversified away by investing in both Repsol SA and Petrobras Argentina 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 Petrobras Argentina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Repsol SA and Petrobras Argentina SA, you can compare the effects of market volatilities on Repsol SA and Petrobras Argentina 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 Petrobras Argentina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Repsol SA and Petrobras Argentina.
Diversification Opportunities for Repsol SA and Petrobras Argentina
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Repsol and Petrobras is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Repsol SA and Petrobras Argentina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrobras Argentina 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 Petrobras Argentina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrobras Argentina has no effect on the direction of Repsol SA i.e., Repsol SA and Petrobras Argentina go up and down completely randomly.
Pair Corralation between Repsol SA and Petrobras Argentina
If you would invest (100.00) in Petrobras Argentina SA on January 25, 2024 and sell it today you would earn a total of 100.00 from holding Petrobras Argentina SA or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Repsol SA vs. Petrobras Argentina SA
Performance |
| Timeline |
| Repsol SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Petrobras Argentina |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Repsol SA and Petrobras Argentina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Repsol SA and Petrobras Argentina
The main advantage of trading using opposite Repsol SA and Petrobras Argentina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Repsol SA position performs unexpectedly, Petrobras Argentina 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 Petrobras Argentina will offset losses from the drop in Petrobras Argentina's long position.| Repsol SA vs. Turning Point Brands | Repsol SA vs. Ambev SA ADR | Repsol SA vs. Vita Coco | Repsol SA vs. Ameriprise Financial |
| Petrobras Argentina vs. Gulf Resources | Petrobras Argentina vs. SL Green Realty | Petrobras Argentina vs. Sensient Technologies | Petrobras Argentina vs. CVR Partners LP |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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