Correlation Between Ebro Foods and Scottish Mortgage
Can any of the company-specific risk be diversified away by investing in both Ebro Foods and Scottish Mortgage 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 Scottish Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ebro Foods SA and Scottish Mortgage Investment, you can compare the effects of market volatilities on Ebro Foods and Scottish Mortgage 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 Scottish Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebro Foods and Scottish Mortgage.
Diversification Opportunities for Ebro Foods and Scottish Mortgage
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ebro and Scottish is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Ebro Foods SA and Scottish Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scottish Mortgage 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 SA are associated (or correlated) with Scottish Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scottish Mortgage has no effect on the direction of Ebro Foods i.e., Ebro Foods and Scottish Mortgage go up and down completely randomly.
Pair Corralation between Ebro Foods and Scottish Mortgage
Assuming the 90 days horizon Ebro Foods SA is expected to under-perform the Scottish Mortgage. But the stock apears to be less risky and, when comparing its historical volatility, Ebro Foods SA is 1.22 times less risky than Scottish Mortgage. The stock trades about -0.08 of its potential returns per unit of risk. The Scottish Mortgage Investment is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,035 in Scottish Mortgage Investment on October 30, 2024 and sell it today you would earn a total of 224.00 from holding Scottish Mortgage Investment or generate 21.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ebro Foods SA vs. Scottish Mortgage Investment
Performance |
| Timeline |
| Ebro Foods SA |
| Scottish Mortgage |
Ebro Foods and Scottish Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ebro Foods and Scottish Mortgage
The main advantage of trading using opposite Ebro Foods and Scottish Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebro Foods position performs unexpectedly, Scottish Mortgage 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 Scottish Mortgage will offset losses from the drop in Scottish Mortgage's long position.| Ebro Foods vs. MAGNUM MINING EXP | Ebro Foods vs. ETFS Coffee ETC | Ebro Foods vs. SALESFORCE INC CDR | Ebro Foods vs. GungHo Online Entertainment |
| Scottish Mortgage vs. National Health Investors | Scottish Mortgage vs. Perdoceo Education | Scottish Mortgage vs. DEVRY EDUCATION GRP | Scottish Mortgage vs. STRAYER EDUCATION |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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