Correlation Between Repsol and Coca Cola

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

By analyzing existing cross correlation between Repsol and Coca Cola European Partners, you can compare the effects of market volatilities on Repsol and Coca Cola 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 Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Repsol and Coca Cola.

Diversification Opportunities for Repsol and Coca Cola

0.82

Correlation Coefficient

Repsol  Coca Cola

Very poor diversification

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

Pair Corralation between Repsol and Coca Cola

Assuming the 90 days trading horizon Repsol is expected to generate 1.04 times more return on investment than Coca Cola. However, Repsol is 1.04 times more volatile than Coca Cola European Partners. It trades about 0.37 of its potential returns per unit of risk. Coca Cola European Partners is currently generating about 0.13 per unit of risk. If you would invest  1,014  in Repsol on April 24, 2025 and sell it today you would earn a total of  293.00  from holding Repsol or generate 28.9% return on investment over 90 days.

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

Repsol  vs.  Coca Cola European Partners

Repsol

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Repsol are ranked lower than 29 (%) 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.

Coca Cola European

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Coca Cola European Partners are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Coca Cola may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Repsol and Coca Cola

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

The idea behind Repsol and Coca Cola European Partners 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.