Correlation Between Nomad Foods and Ebro Foods
Can any of the company-specific risk be diversified away by investing in both Nomad Foods and Ebro Foods 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 Nomad Foods and Ebro Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomad Foods and Ebro Foods SA, you can compare the effects of market volatilities on Nomad Foods and Ebro Foods 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 Nomad Foods with a short position of Ebro Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomad Foods and Ebro Foods.
Diversification Opportunities for Nomad Foods and Ebro Foods
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nomad and Ebro is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Nomad Foods and Ebro Foods SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebro Foods SA and Nomad Foods 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 Nomad Foods are associated (or correlated) with Ebro Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ebro Foods SA has no effect on the direction of Nomad Foods i.e., Nomad Foods and Ebro Foods go up and down completely randomly.
Pair Corralation between Nomad Foods and Ebro Foods
Assuming the 90 days trading horizon Nomad Foods is expected to generate 2.57 times more return on investment than Ebro Foods. However, Nomad Foods is 2.57 times more volatile than Ebro Foods SA. It trades about 0.06 of its potential returns per unit of risk. Ebro Foods SA is currently generating about -0.13 per unit of risk. If you would invest 1,600 in Nomad Foods on September 12, 2024 and sell it today you would earn a total of 40.00 from holding Nomad Foods or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nomad Foods vs. Ebro Foods SA
Performance |
| Timeline |
| Nomad Foods |
| Ebro Foods SA |
Nomad Foods and Ebro Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomad Foods and Ebro Foods
The main advantage of trading using opposite Nomad Foods and Ebro Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomad Foods position performs unexpectedly, Ebro Foods 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 Ebro Foods will offset losses from the drop in Ebro Foods' long position.| Nomad Foods vs. Apple Inc | Nomad Foods vs. Apple Inc | Nomad Foods vs. Apple Inc | Nomad Foods vs. Apple Inc |
| Ebro Foods vs. Hormel Foods | Ebro Foods vs. Superior Plus Corp | Ebro Foods vs. SIVERS SEMICONDUCTORS AB | Ebro Foods vs. NorAm Drilling AS |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |