Correlation Between Repsol SA and Eneos Holdings

Can any of the company-specific risk be diversified away by investing in both Repsol SA and Eneos Holdings 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 Eneos Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Repsol SA and Eneos Holdings ADR, you can compare the effects of market volatilities on Repsol SA and Eneos Holdings 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 Eneos Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Repsol SA and Eneos Holdings.

Diversification Opportunities for Repsol SA and Eneos Holdings

-0.09

Correlation Coefficient

Repsol SA  Eneos Holdings

Good diversification

The 3 months correlation between Repsol and Eneos is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Repsol SA and Eneos Holdings ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eneos Holdings ADR 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 Eneos Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eneos Holdings ADR has no effect on the direction of Repsol SA i.e., Repsol SA and Eneos Holdings go up and down completely randomly.

Pair Corralation between Repsol SA and Eneos Holdings

If you would invest  1,026  in Eneos Holdings ADR on September 17, 2024 and sell it today you would lose (38.00) from holding Eneos Holdings ADR or give up 3.7% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

Repsol SA  vs.  Eneos Holdings ADR

Repsol SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Repsol SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Repsol SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eneos Holdings ADR

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Eneos Holdings ADR are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile essential indicators, Eneos Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Repsol SA and Eneos Holdings

The main advantage of trading using opposite Repsol SA and Eneos Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Repsol SA position performs unexpectedly, Eneos Holdings 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 Eneos Holdings will offset losses from the drop in Eneos Holdings' long position.

The idea behind Repsol SA and Eneos Holdings ADR 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.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.