Correlation Between ONWARD MEDICAL and Ebro Foods
Can any of the company-specific risk be diversified away by investing in both ONWARD MEDICAL 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 ONWARD MEDICAL and Ebro Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ONWARD MEDICAL BV and Ebro Foods SA, you can compare the effects of market volatilities on ONWARD MEDICAL 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 ONWARD MEDICAL with a short position of Ebro Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of ONWARD MEDICAL and Ebro Foods.
Diversification Opportunities for ONWARD MEDICAL and Ebro Foods
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between ONWARD and Ebro is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding ONWARD MEDICAL BV 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 ONWARD MEDICAL 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 ONWARD MEDICAL BV 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 ONWARD MEDICAL i.e., ONWARD MEDICAL and Ebro Foods go up and down completely randomly.
Pair Corralation between ONWARD MEDICAL and Ebro Foods
Assuming the 90 days horizon ONWARD MEDICAL BV is expected to generate 7.08 times more return on investment than Ebro Foods. However, ONWARD MEDICAL is 7.08 times more volatile than Ebro Foods SA. It trades about 0.17 of its potential returns per unit of risk. Ebro Foods SA is currently generating about 0.09 per unit of risk. If you would invest 524.00 in ONWARD MEDICAL BV on October 23, 2024 and sell it today you would earn a total of 66.00 from holding ONWARD MEDICAL BV or generate 12.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ONWARD MEDICAL BV vs. Ebro Foods SA
Performance |
| Timeline |
| ONWARD MEDICAL BV |
| Ebro Foods SA |
ONWARD MEDICAL and Ebro Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ONWARD MEDICAL and Ebro Foods
The main advantage of trading using opposite ONWARD MEDICAL and Ebro Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ONWARD MEDICAL 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.| ONWARD MEDICAL vs. FORMPIPE SOFTWARE AB | ONWARD MEDICAL vs. Aristocrat Leisure Limited | ONWARD MEDICAL vs. VITEC SOFTWARE GROUP | ONWARD MEDICAL vs. AXWAY SOFTWARE EO |
| Ebro Foods vs. Genertec Universal Medical | Ebro Foods vs. ONWARD MEDICAL BV | Ebro Foods vs. AXWAY SOFTWARE EO | Ebro Foods vs. VITEC SOFTWARE GROUP |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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