Correlation Between All Iron and Repsol

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

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

Diversification Opportunities for All Iron and Repsol

0.69

Correlation Coefficient

All Iron  Repsol

Poor diversification

The 3 months correlation between All and Repsol is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding All Iron Re and Repsol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repsol and All Iron 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 All Iron Re are associated (or correlated) with Repsol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repsol has no effect on the direction of All Iron i.e., All Iron and Repsol go up and down completely randomly.

Pair Corralation between All Iron and Repsol

Assuming the 90 days trading horizon All Iron is expected to generate 2.4 times less return on investment than Repsol. In addition to that, All Iron is 1.04 times more volatile than Repsol. It trades about 0.15 of its total potential returns per unit of risk. Repsol is currently generating about 0.37 per unit of volatility. 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	Significant
Accuracy	98.41%
Values	Daily Returns

All Iron Re  vs.  Repsol

All Iron Re

Risk-Adjusted Performance

Good

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

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.

Pair Trading with All Iron and Repsol

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

The idea behind All Iron Re and Repsol 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.