Correlation Between Ebro Foods and Public Storage
Can any of the company-specific risk be diversified away by investing in both Ebro Foods and Public Storage 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 Public Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ebro Foods and Public Storage, you can compare the effects of market volatilities on Ebro Foods and Public Storage 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 Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebro Foods and Public Storage.
Diversification Opportunities for Ebro Foods and Public Storage
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ebro and Public is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Ebro Foods and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage 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 Public Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Storage has no effect on the direction of Ebro Foods i.e., Ebro Foods and Public Storage go up and down completely randomly.
Pair Corralation between Ebro Foods and Public Storage
Assuming the 90 days trading horizon Ebro Foods is expected to generate 1.86 times less return on investment than Public Storage. But when comparing it to its historical volatility, Ebro Foods is 1.91 times less risky than Public Storage. It trades about 0.02 of its potential returns per unit of risk. Public Storage is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 27,916 in Public Storage on November 28, 2024 and sell it today you would earn a total of 3,250 from holding Public Storage or generate 11.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.19% |
| Values | Daily Returns |
Ebro Foods vs. Public Storage
Performance |
| Timeline |
| Ebro Foods |
| Public Storage |
Ebro Foods and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ebro Foods and Public Storage
The main advantage of trading using opposite Ebro Foods and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebro Foods position performs unexpectedly, Public Storage 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 Public Storage will offset losses from the drop in Public Storage's long position.| Ebro Foods vs. Roper Technologies | Ebro Foods vs. Check Point Software | Ebro Foods vs. Allianz Technology Trust | Ebro Foods vs. Southwest Airlines Co |
| Public Storage vs. Cellnex Telecom SA | Public Storage vs. Concurrent Technologies Plc | Public Storage vs. Vitec Software Group | Public Storage vs. SMA Solar Technology |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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