Correlation Between SHIP HEALTHCARE and Ebro Foods
Can any of the company-specific risk be diversified away by investing in both SHIP HEALTHCARE 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 SHIP HEALTHCARE and Ebro Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHIP HEALTHCARE HLDGINC and Ebro Foods SA, you can compare the effects of market volatilities on SHIP HEALTHCARE 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 SHIP HEALTHCARE with a short position of Ebro Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIP HEALTHCARE and Ebro Foods.
Diversification Opportunities for SHIP HEALTHCARE and Ebro Foods
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between SHIP and Ebro is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding SHIP HEALTHCARE HLDGINC 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 SHIP HEALTHCARE 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 SHIP HEALTHCARE HLDGINC 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 SHIP HEALTHCARE i.e., SHIP HEALTHCARE and Ebro Foods go up and down completely randomly.
Pair Corralation between SHIP HEALTHCARE and Ebro Foods
Assuming the 90 days horizon SHIP HEALTHCARE HLDGINC is expected to generate 2.86 times more return on investment than Ebro Foods. However, SHIP HEALTHCARE is 2.86 times more volatile than Ebro Foods SA. It trades about 0.02 of its potential returns per unit of risk. Ebro Foods SA is currently generating about 0.03 per unit of risk. If you would invest 1,136 in SHIP HEALTHCARE HLDGINC on September 3, 2024 and sell it today you would earn a total of 214.00 from holding SHIP HEALTHCARE HLDGINC or generate 18.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SHIP HEALTHCARE HLDGINC vs. Ebro Foods SA
Performance |
| Timeline |
| SHIP HEALTHCARE HLDGINC |
| Ebro Foods SA |
SHIP HEALTHCARE and Ebro Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIP HEALTHCARE and Ebro Foods
The main advantage of trading using opposite SHIP HEALTHCARE and Ebro Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIP HEALTHCARE 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.| SHIP HEALTHCARE vs. DEVRY EDUCATION GRP | SHIP HEALTHCARE vs. Titan Machinery | SHIP HEALTHCARE vs. CHINA EDUCATION GROUP | SHIP HEALTHCARE vs. United Utilities Group |
| Ebro Foods vs. AEON STORES | Ebro Foods vs. JIAHUA STORES | Ebro Foods vs. NorAm Drilling AS | Ebro Foods vs. HK Electric Investments |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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