Correlation Between Repsol and Bankinter

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

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

Diversification Opportunities for Repsol and Bankinter

0.77

Correlation Coefficient

Repsol  Bankinter

Poor diversification

The 3 months correlation between Repsol and Bankinter is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Repsol and Bankinter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankinter and Repsol 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 are associated (or correlated) with Bankinter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bankinter has no effect on the direction of Repsol i.e., Repsol and Bankinter go up and down completely randomly.

Pair Corralation between Repsol and Bankinter

Assuming the 90 days trading horizon Repsol is expected to generate 0.87 times more return on investment than Bankinter. However, Repsol is 1.15 times less risky than Bankinter. It trades about 0.4 of its potential returns per unit of risk. Bankinter is currently generating about 0.21 per unit of risk. If you would invest  992.00  in Repsol on April 21, 2025 and sell it today you would earn a total of  317.00  from holding Repsol or generate 31.96% return on investment over 90 days.

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

Repsol  vs.  Bankinter

Repsol

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Repsol are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Repsol exhibited solid returns over the last few months and may actually be approaching a breakup point.

Bankinter

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bankinter are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Bankinter exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Repsol and Bankinter

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

The idea behind Repsol and Bankinter 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.