Correlation Between Banco Bradesco and Repsol SA

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

By analyzing existing cross correlation between Banco Bradesco DRC and Repsol SA, you can compare the effects of market volatilities on Banco Bradesco and Repsol SA 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 Banco Bradesco with a short position of Repsol SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and Repsol SA.

Diversification Opportunities for Banco Bradesco and Repsol SA

-0.41

Correlation Coefficient

Banco Bradesco  Repsol SA

Very good diversification

The 3 months correlation between Banco and Repsol is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco DRC and Repsol SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repsol SA and Banco Bradesco 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 Banco Bradesco DRC are associated (or correlated) with Repsol SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repsol SA has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and Repsol SA go up and down completely randomly.

Pair Corralation between Banco Bradesco and Repsol SA

If you would invest  356,000  in Banco Bradesco DRC on April 22, 2025 and sell it today you would earn a total of  7,000  from holding Banco Bradesco DRC or generate 1.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Banco Bradesco DRC  vs.  Repsol SA

Banco Bradesco DRC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Banco Bradesco DRC are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Banco Bradesco sustained solid returns over the last few months and may actually be approaching a breakup point.

Repsol SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Repsol SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat 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.

Pair Trading with Banco Bradesco and Repsol SA

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

The idea behind Banco Bradesco DRC and Repsol SA 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.