Correlation Between Repsol SA and Unit
Can any of the company-specific risk be diversified away by investing in both Repsol SA and Unit 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 Unit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Repsol SA and Unit Corporation, you can compare the effects of market volatilities on Repsol SA and Unit 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 Unit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Repsol SA and Unit.
Diversification Opportunities for Repsol SA and Unit
Pay attention - limited upside
The 3 months correlation between Repsol and Unit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Repsol SA and Unit Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unit 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 Unit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unit has no effect on the direction of Repsol SA i.e., Repsol SA and Unit go up and down completely randomly.
Pair Corralation between Repsol SA and Unit
If you would invest 31.00 in Unit Corporation on April 24, 2025 and sell it today you would earn a total of 11.00 from holding Unit Corporation or generate 35.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Repsol SA vs. Unit Corp.
Performance |
Timeline |
Repsol SA |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Unit |
Risk-Adjusted Performance
Good
Weak | Strong |
Repsol SA and Unit Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Repsol SA and Unit
The main advantage of trading using opposite Repsol SA and Unit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Repsol SA position performs unexpectedly, Unit 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 Unit will offset losses from the drop in Unit's long position.The idea behind Repsol SA and Unit Corporation 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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