Correlation Between Ebro Foods and Molson Coors
Can any of the company-specific risk be diversified away by investing in both Ebro Foods and Molson Coors 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 Ebro Foods and Molson Coors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ebro Foods and Molson Coors Beverage, you can compare the effects of market volatilities on Ebro Foods and Molson Coors 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 Ebro Foods with a short position of Molson Coors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebro Foods and Molson Coors.
Diversification Opportunities for Ebro Foods and Molson Coors
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ebro and Molson is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Ebro Foods and Molson Coors Beverage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molson Coors Beverage and Ebro 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 Ebro Foods are associated (or correlated) with Molson Coors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molson Coors Beverage has no effect on the direction of Ebro Foods i.e., Ebro Foods and Molson Coors go up and down completely randomly.
Pair Corralation between Ebro Foods and Molson Coors
Assuming the 90 days trading horizon Ebro Foods is expected to generate 0.29 times more return on investment than Molson Coors. However, Ebro Foods is 3.4 times less risky than Molson Coors. It trades about 0.15 of its potential returns per unit of risk. Molson Coors Beverage is currently generating about -0.01 per unit of risk. If you would invest 1,578 in Ebro Foods on October 30, 2024 and sell it today you would earn a total of 27.00 from holding Ebro Foods or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ebro Foods vs. Molson Coors Beverage
Performance |
| Timeline |
| Ebro Foods |
| Molson Coors Beverage |
Ebro Foods and Molson Coors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ebro Foods and Molson Coors
The main advantage of trading using opposite Ebro Foods and Molson Coors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebro Foods position performs unexpectedly, Molson Coors 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 Molson Coors will offset losses from the drop in Molson Coors' long position.| Ebro Foods vs. Sabien Technology Group | Ebro Foods vs. Gaztransport et Technigaz | Ebro Foods vs. Baker Steel Resources | Ebro Foods vs. Auction Technology Group |
| Molson Coors vs. Check Point Software | Molson Coors vs. Vulcan Materials Co | Molson Coors vs. Darden Restaurants | Molson Coors vs. Batm Advanced Communications |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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