Correlation Between Repsol SA and Eni SPA

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

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

Diversification Opportunities for Repsol SA and Eni SPA

0.82

Correlation Coefficient

Repsol SA  Eni SPA

Very poor diversification

The 3 months correlation between Repsol and Eni is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Repsol SA and Eni SpA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eni SpA 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 Eni SPA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eni SpA ADR has no effect on the direction of Repsol SA i.e., Repsol SA and Eni SPA go up and down completely randomly.

Pair Corralation between Repsol SA and Eni SPA

Assuming the 90 days horizon Repsol SA is expected to generate 1.29 times more return on investment than Eni SPA. However, Repsol SA is 1.29 times more volatile than Eni SpA ADR. It trades about 0.24 of its potential returns per unit of risk. Eni SpA ADR is currently generating about 0.15 per unit of risk. If you would invest  1,454  in Repsol SA on July 7, 2025 and sell it today you would earn a total of  320.00  from holding Repsol SA or generate 22.01% return on investment over 90 days.

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

Repsol SA  vs.  Eni SpA ADR

Repsol SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Repsol SA are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Repsol SA showed solid returns over the last few months and may actually be approaching a breakup point.

Eni SpA ADR

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eni SpA ADR are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Eni SPA may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Repsol SA and Eni SPA

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

The idea behind Repsol SA and Eni SpA 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.