Correlation Between ARDAGH METAL and Ebro Foods
Can any of the company-specific risk be diversified away by investing in both ARDAGH METAL 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 ARDAGH METAL and Ebro Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARDAGH METAL PACDL 0001 and Ebro Foods SA, you can compare the effects of market volatilities on ARDAGH METAL 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 ARDAGH METAL with a short position of Ebro Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARDAGH METAL and Ebro Foods.
Diversification Opportunities for ARDAGH METAL and Ebro Foods
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ARDAGH and Ebro is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding ARDAGH METAL PACDL 0001 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 ARDAGH METAL 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 ARDAGH METAL PACDL 0001 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 ARDAGH METAL i.e., ARDAGH METAL and Ebro Foods go up and down completely randomly.
Pair Corralation between ARDAGH METAL and Ebro Foods
Assuming the 90 days horizon ARDAGH METAL PACDL 0001 is expected to under-perform the Ebro Foods. In addition to that, ARDAGH METAL is 3.73 times more volatile than Ebro Foods SA. It trades about -0.29 of its total potential returns per unit of risk. Ebro Foods SA is currently generating about -0.02 per unit of volatility. If you would invest 1,580 in Ebro Foods SA on October 12, 2024 and sell it today you would lose (6.00) from holding Ebro Foods SA or give up 0.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ARDAGH METAL PACDL 0001 vs. Ebro Foods SA
Performance |
| Timeline |
| ARDAGH METAL PACDL |
| Ebro Foods SA |
ARDAGH METAL and Ebro Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARDAGH METAL and Ebro Foods
The main advantage of trading using opposite ARDAGH METAL and Ebro Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARDAGH METAL 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.| ARDAGH METAL vs. Harmony Gold Mining | ARDAGH METAL vs. Cal Maine Foods | ARDAGH METAL vs. SENECA FOODS A | ARDAGH METAL vs. Eurasia Mining Plc |
| Ebro Foods vs. ARDAGH METAL PACDL 0001 | Ebro Foods vs. GOODYEAR T RUBBER | Ebro Foods vs. Jacquet Metal Service | Ebro Foods vs. JD SPORTS FASH |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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