Correlation Between Ebro Foods and Creo Medical
Can any of the company-specific risk be diversified away by investing in both Ebro Foods and Creo Medical 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 Creo Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ebro Foods and Creo Medical Group, you can compare the effects of market volatilities on Ebro Foods and Creo Medical 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 Creo Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebro Foods and Creo Medical.
Diversification Opportunities for Ebro Foods and Creo Medical
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ebro and Creo is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ebro Foods and Creo Medical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creo Medical Group 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 Creo Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creo Medical Group has no effect on the direction of Ebro Foods i.e., Ebro Foods and Creo Medical go up and down completely randomly.
Pair Corralation between Ebro Foods and Creo Medical
Assuming the 90 days trading horizon Ebro Foods is expected to generate 0.15 times more return on investment than Creo Medical. However, Ebro Foods is 6.82 times less risky than Creo Medical. It trades about 0.02 of its potential returns per unit of risk. Creo Medical Group is currently generating about -0.3 per unit of risk. If you would invest 1,575 in Ebro Foods on September 12, 2024 and sell it today you would earn a total of 10.00 from holding Ebro Foods or generate 0.63% 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. Creo Medical Group
Performance |
| Timeline |
| Ebro Foods |
| Creo Medical Group |
Ebro Foods and Creo Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ebro Foods and Creo Medical
The main advantage of trading using opposite Ebro Foods and Creo Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebro Foods position performs unexpectedly, Creo Medical 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 Creo Medical will offset losses from the drop in Creo Medical's long position.| Ebro Foods vs. One Media iP | Ebro Foods vs. Catena Media PLC | Ebro Foods vs. Iron Mountain | Ebro Foods vs. Prosiebensat 1 Media |
| Creo Medical vs. Blackrock World Mining | Creo Medical vs. GreenX Metals | Creo Medical vs. Southwest Airlines Co | Creo Medical vs. Central Asia Metals |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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