Correlation Between MOL PLC and Shell PLC

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

By analyzing existing cross correlation between MOL PLC ADR and Shell PLC, you can compare the effects of market volatilities on MOL PLC and Shell PLC 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 MOL PLC with a short position of Shell PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of MOL PLC and Shell PLC.

Diversification Opportunities for MOL PLC and Shell PLC

-0.2

Correlation Coefficient

MOL PLC  Shell PLC

Good diversification

The 3 months correlation between MOL and Shell is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding MOL PLC ADR and Shell PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shell PLC and MOL 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 MOL PLC ADR are associated (or correlated) with Shell PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shell PLC has no effect on the direction of MOL PLC i.e., MOL PLC and Shell PLC go up and down completely randomly.

Pair Corralation between MOL PLC and Shell PLC

Assuming the 90 days horizon MOL PLC ADR is expected to under-perform the Shell PLC. In addition to that, MOL PLC is 1.55 times more volatile than Shell PLC. It trades about -0.01 of its total potential returns per unit of risk. Shell PLC is currently generating about 0.03 per unit of volatility. If you would invest  3,515  in Shell PLC on June 29, 2025 and sell it today you would earn a total of  85.00  from holding Shell PLC or generate 2.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

MOL PLC ADR  vs.  Shell PLC

MOL PLC ADR

Risk-Adjusted Performance

Weakest

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

Shell PLC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Shell PLC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Shell PLC is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with MOL PLC and Shell PLC

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

The idea behind MOL PLC ADR and Shell PLC 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.