Correlation Between Genertec Universal and Ebro Foods
Can any of the company-specific risk be diversified away by investing in both Genertec Universal 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 Genertec Universal and Ebro Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genertec Universal Medical and Ebro Foods SA, you can compare the effects of market volatilities on Genertec Universal 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 Genertec Universal with a short position of Ebro Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genertec Universal and Ebro Foods.
Diversification Opportunities for Genertec Universal and Ebro Foods
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Genertec and Ebro is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Genertec Universal Medical 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 Genertec Universal 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 Genertec Universal Medical 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 Genertec Universal i.e., Genertec Universal and Ebro Foods go up and down completely randomly.
Pair Corralation between Genertec Universal and Ebro Foods
Assuming the 90 days horizon Genertec Universal Medical is expected to generate 3.36 times more return on investment than Ebro Foods. However, Genertec Universal is 3.36 times more volatile than Ebro Foods SA. It trades about 0.04 of its potential returns per unit of risk. Ebro Foods SA is currently generating about 0.05 per unit of risk. If you would invest 47.00 in Genertec Universal Medical on November 3, 2024 and sell it today you would earn a total of 12.00 from holding Genertec Universal Medical or generate 25.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genertec Universal Medical vs. Ebro Foods SA
Performance |
| Timeline |
| Genertec Universal |
| Ebro Foods SA |
Genertec Universal and Ebro Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genertec Universal and Ebro Foods
The main advantage of trading using opposite Genertec Universal and Ebro Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genertec Universal 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.| Genertec Universal vs. Guangdong Investment Limited | Genertec Universal vs. Salesforce | Genertec Universal vs. MGIC INVESTMENT | Genertec Universal vs. ECHO INVESTMENT ZY |
| Ebro Foods vs. BioNTech SE | Ebro Foods vs. Harmony Gold Mining | Ebro Foods vs. Sunny Optical Technology | Ebro Foods vs. Allegheny Technologies Incorporated |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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